Fed Maintains Rates—Impact on Crypto and Bitcoin’s Price

• The Fed’s decision to maintain interest rates at 4.25%-4.5% aligns with its cautious approach, despite Trump’s push for rate cuts.
• Bitcoin and the broader crypto market remained stable, with investors now focusing on Powell’s guidance and future Fed policy shifts.

Following CNF’s earlier report on US Fed and rump administration set to influence Bitcoin’s price in Q1 2025, the Federal Reserve has officially decided to keep interest rates unchanged at 4.25% to 4.5% after its first policy meeting of 2025. This comes despite calls from President Donald Trump to lower rates, signaling the Fed’s cautious approach.

The decision follows three consecutive rate cuts in 2024 and reflects the central bank’s intent to maintain economic stability amid ongoing inflation concerns. Additionally, the Federal Reserve shared a post on X, highlighting that Fed Chair Jerome Powell and his team now face a complex economic landscape influenced by Trump’s policy proposals, including potential tariffs and deregulation efforts.

Chair Powell answers reporters' questions at the FOMC press conference on January 29, 2025. https://t.co/siWde1Rh9D pic.twitter.com/NvVVU0cDxz

— Federal Reserve (@federalreserve) January 29, 2025

Fed Takes a Wait-and-See Approach

Importantly, under the leadership of Chair Jerome Powell, the Fed remains cautious, with projections indicating only one or two rate cuts in 2025. This measured stance follows a significant tightening cycle that began in 2022, when the Fed raised interest rates by 5.25 percentage points to combat the worst inflation in decades. Since July 2023, the Fed has maintained steady rates, aiming to gradually bring inflation down to its 0.5-2% target.

Despite Trump’s push for immediate rate cuts, the Fed remains independent in its policy decisions. Meanwhile, Trump’s proposed 25% tariffs on imports from Mexico and Canada could increase inflationary pressures, further complicating the central bank’s outlook.

Crypto Market Stays Steady Amid Fed Decision and Bitcoin Price Update

As the crypto market had largely anticipated the Fed’s decision, volatility remained minimal. Bitcoin saw a slight dip, dropping from $102.9K to $101.7K, but broader market sentiment remained stable. Analysts suggest that crypto investors are now focused on Powell’s future guidance and the next Federal Open Market Committee (FOMC) meeting for indications of potential policy shifts.

With Trump’s economic policies and potential labor market disruptions from large-scale deportations, analysts believe inflation could remain a key issue. Any unexpected moves from the Fed or new economic pressures could drive volatility in both traditional and crypto markets in the coming months.

As of now, Bitcoin (BTC) is trading at $105,406.33, with an increase of 3.12% in the past day and 3.31% in the past week. See BTC price chart below.