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Highlights
- Despite Trump’s pressure, the FOMC meeting might end with an unchanged interest rate.
- Experts cite the inflation and Trump’s tariffs as factors to keep interest rate at 4.25-4.50%
- The crypto market witnessed renewed interest today, but could crash with the Fed’s decision.
The Federal Reserve officers are to gather today, June 17, in Washington, D.C., for the much-awaited FOMC meeting. After the implementation of Trump’s tariff, there are significant concerns about rising inflation and an unstable financial market, and the Fed’s decision on interest rates could bring relief. Interestingly, the crypto market has been booming, with gains over the last two days. It signals high optimism among investors ahead of the Fed meeting and other factors.
Fed To Keep Interest Rate Unchanged in FOMC Meeting
Despite Donald Trump’s request for a 1% Fed rate cut, experts believe the rates will likely stay steady this month. The EU has already reduced the rates three times since Trump’s inauguration. However, despite the US President’s appeal to the Fed Chair Jerome Powell for the same, the odds are higher on “No change.”
Polymarket data and economists’ forecasts reveal that the Federal Reserve will maintain the interest rate at 4.25-$4.50%. The expectations are already reduced for the total rate cuts this year. The first would likely happen after the September FOMC meeting.
This could negatively impact the crypto market, but since it’s just an anticipation, there’s still hope.
Why Isn’t the Fed Cutting Interest Rates?
Market experts believe that there are significant inflation concerns due to Trump’s tariff implementation. Although they acknowledge the cooled-down inflation, they believe there’s a high risk, as tariffs could drive the price up, introducing inflationary pressure.
Another potential reason is the “Wait-and-See” strategy, where the Fed officials are monitoring the economic impact of tariffs before making many major decisions. There are significant concerns around tariff dual threats, as it may raise inflation (prices) and slow down economic growth, as well as unemployment.
Besides, the CPI and PPI data gave the Fed room to hold the rate cuts at the June FOMC meeting.
Why is the Crypto Market Up Despite an Unlikely FOMC Meeting Result?
Often, macroeconomic events impact the crypto performance even before they happen. However, against odds, the crypto market is in green today, recovering from an earlier $1.15 liquidation crash fueled by the Israel-Iran conflict.
Notably, the investors have adapted to the current geopolitical conditions, as they believe the peace will be made soon. Moreover, the liquidity is re-entering the market, as the traders’ confidence recovered amid Bitcoin price surge, Solana ETF approval hype, and additional advancements in the industry.
Moreover, there’s little expectation for the Fed meeting as experts have been predicting unchanged rates. So the investors’ sentiments remained unaffected. Hence, the digital asset prices are recovering today.
Frequently Asked Questions (FAQs)
1. When is the FOMC meeting?
2. Why won’t the Fed cut the interest rate in June?
3. Will the crypto market crash next?
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