The US Federal Reserve maintained interest rates at 4.25%–4.50% at the FOMC decision on June 18, 2024, for the fourth time since December.
The market widely anticipated this move. CME FedWatch data showed a 99.9% likelihood of a rate freeze before the meeting. Inflation mitigation, a robust labor market, and ongoing trade-related price risks influenced the decision.
Fed Rate Continues to Frustrate US Markets
Bitcoin remained near $105,000, and Ethereum traded around $2,500. Traders are closely watching for signals of the Fed's next move.
The Fed released an economic outlook summary and dot plot along with the decision. This shows whether policymakers anticipate two rate cuts in 2025 or are considering fewer reductions.
The dot plot is more important than the decision itself. If FOMC members now expect only one cut or delay it to the fourth quarter, the market may react cautiously. A hawkish stance could pressure risk assets, including cryptocurrencies.
The Fed last raised rates in July 2023. Since then, inflation has steadily decreased from 5.3% to 2.4% in June, approaching the Fed's 2% target. However, service inflation and tariff-related costs remain entrenched.
The cryptocurrency market is particularly sensitive to Fed signals. Low rates typically increase liquidity and risk appetite, driving capital into Bitcoin, Ethereum, and altcoins.
Conversely, a long-term high-interest environment limits upward potential.
With economic concerns growing due to the Iran-Israel conflict, rate policy is also emerging as a political issue. Donald Trump publicly pressured the Fed for faster rate cuts, but current policymakers are maintaining a cautious approach.
The July 31 FOMC meeting will depend on June inflation and employment data. For now, cryptocurrency traders will analyze Powell's statements to gauge the Fed's timing and market tolerance.
