The U.S. Federal Reserve has decided not to change interest rates at 4.25-4.50%. This decision comes at a time when there’s already a lot of tension around what the Fed should do next. The central bank’s key interest rate remains between 4.25% and 4.5%, where it has been since last December. Bitcoin (BTC) price now risks fall below $104,000.
In its latest statement, the Fed removed previous cautions of increasing unemployment and inflation risks, suggesting a shift in tone. It reported that, although economic uncertainty has “lessened,” it remains significant. The central bank lowered its 2025 GDP forecast to 1.4% while increasing the forecasted inflation rate to 3%, suggesting slower growth in the future.
Just hours before the announcement, former President Donald Trump criticized Fed Chair Jerome Powell, calling him “stupid” and accusing him of keeping interest rates too high for too long. Bitcoin price saw a modest drop, falling from $104,500 to $104,128 owing to the Fed’s hawkish stance.
The Fed’s updated “dot plot,” which shows officials’ expectations for rate changes, now points to just two rate cuts in 2025. That’s fewer than previously expected, and it also cut one rate cut each from the 2026 and 2027 outlook. By 2027, the Fed funds rate is expected to be around 3.4%.
Interestingly, 7 out of 19 Fed officials don’t want any rate cuts this year, up from just 4 in March. Still, the committee voted unanimously to keep rates steady. This reflects a cautious approach due to mixed signals in the economy.
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