Fed holds rates steady, bitcoin tries to reclaim $100,000 level
Quick Take
- The U.S. Federal Reserve left interest rates unchanged Wednesday at a range between 4.25% and 4.50%.
- The committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.
The Federal Open Market Committee (FOMC) maintained the benchmark federal funds rate at the current range between 4.25% and 4.50%.
"Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace," the U.S. Federal Reserve said Wednesday in a statement. "The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated."
The Fed seeks to achieve maximum employment and inflation at the rate of 2% over the longer run.
"Uncertainty about the economic outlook has increased further," the statement continued. "The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen."
The committee said Wednesday it will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage‑backed securities.
At its last meeting in March, the FOMC said it would slow the pace of the decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion and maintaining the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion.
Fed Chair Jerome Powell is scheduled to hold a press conference at 2:30 p.m. ET.
The price of bitcoin traded around $96,400 at publication time, up 1.9% over the past 24 hours according to The Block's price data. The world's largest crypto had traded up near the $97,300 level earlier in the day. Bitcoin dropped below the $100,000 level in late February and has yet to reclaim it.
"It’s a positioning regime defined more by caution than conviction, with the derivatives market reflecting structural trades rather than directional aggression," said Dr. Kirill Kretov, senior automation expert at CoinPanel, to The Block earlier Wednesday. "There’s little sign of hedging downside, nor are traders leaning too far into bullish risk-repricing."
Meanwhile, K33 analysts declared a "hold in May and stay" mantra for the bitcoin market, saying that 2025 will be different from prior summer lulls.
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