Bitcoin Stays Steady Following Fed’s Decision to Keep Rates Unchanged

Bitcoin shows little volatility after the Fed maintains interest rates, holding steady above $96,000. Chair Jerome Powell faces pressure for cuts, but inflation remains a concern. Fidelity’s Jurrien Timmer notes inflation moves closer to target while rate cut expectations have diminished since April.

In the wake of the U.S. Federal Reserve’s recent decision, Bitcoin hasn’t shown much movement. The Fed opted to maintain the benchmark interest rate between 4.25% and 4.5%, a choice that was largely anticipated. Currently, the cryptocurrency continues to trade slightly above the $96,000 mark, indicating persistent stability despite economic pressures.

Fed Chair Jerome Powell is under mounting pressure to reduce rates, aiming to help stimulate the economy. Despite this, he remains adamant about not succumbing to such demands just yet. The Fed has pointed out that inflation is still running at an elevated level, contributing to a backdrop of uncertainty regarding future economic conditions.

Jurrien Timmer, Fidelity’s director of global macro, weighs in on the situation, noting that the Fed is appropriately pausing to gain better insights into growth and inflation. He acknowledges that the central bank is currently balancing its dual objectives of achieving full employment and maintaining a 2% inflation rate, which complicates its decision-making process.

Timmer also mentioned that inflation is edging closer to the Fed’s desired target, suggesting that there’s potential for rate cuts in the near future. Nonetheless, even with the expectation for three cuts this year, optimism appears to be tempered. Rate cut anticipations have certainly waned since their peak levels noted back in April, reflecting a cautious market sentiment moving forward.