Fed Maintains Rates; Omits Unemployment, Inflation Concerns – Coincu

The Federal Reserve, at its June 18 meeting, maintained the benchmark interest rate at 4.25%–4.5%, omitting usual verbiage on inflation and unemployment risks.

This steadiness impacts crypto markets, traditionally responding positively to stability in monetary policies.

Fed’s Decision Sparks Interest in Crypto Markets

The Federal Open Market Committee (FOMC) meeting on June 18 resulted in the decision to hold the benchmark interest rate steady at 4.25%–4.5%. No explicit references to unemployment or inflation escalation were included, a change from past statements. Jerome Powell, Fed Chair, emphasized ongoing economic expansion without highlighting imminent macroeconomic risks, stating, “Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and inflation has eased over the past year but remains elevated.”

The steady rate suggests reduced near-term aggressive tightening, typically seen as favorable for risk assets, including cryptocurrencies. Market participants typically interpret such decisions as lacking immediate pressure from inflation or employment changes.

Reaction from the crypto market was moderately positive, as expectations of reduced monetary tightening can encourage a risk-on sentiment, particularly benefiting Bitcoin and Ethereum. However, key figures remained silent on public platforms during this period.

Bitcoin’s Strong Rally Following Fed Rate Stability

Did you know? Historically, when the Federal Reserve signaled a pause in rate hikes, Bitcoin often experienced price rallies, indicating a strong correlation between dovish monetary policy and increased investor risk appetite.

Bitcoin (BTC) currently prices at $104,858.68, with a market cap of $2.08 trillion, holding 64.04% market dominance, according to CoinMarketCap data. Its 24-hour trading volume decreased by 16.29%, while prices rose 10.49%. Over 60 and 90 days, BTC saw gains of 22.95% and 24.14%, respectively. The BTC supply is close to its max at 19,879,787 of 21 million.

Insights from Coincu suggest that if the Fed continues its cautious approach without citing further macroeconomic risks, the crypto market could experience increased volatility. Historical trends imply that major coins like BTC and ETH may continue upward if global investor sentiment shifts toward riskier, higher-yielding assets.