Key Takeaways
- Bitcoin remains stable as investors await outcomes from the Federal Open Market Committee meeting.
- Markets have lowered expectations for interest rate cuts this year, anticipating only one or two reductions.
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Bitcoin stays range-bound between $104,000 and $105,000 as investors brace for the FOMC meeting scheduled for the next few hours.
With another rate hold widely expected, the key focus will be on Fed Chair Jerome Powell’s tone and any hints at future policy direction, especially as the outlook for rate cuts has moderated. Fed fund futures and bond markets now price in just one or two reductions this year, a retreat from previous forecasts calling for three or four.
What to expect from the Fed meeting?
All eyes are on the Fed’s updated “dot plot,” which will reveal where officials expect interest rates to head through the rest of 2025.
In March, the dot plot showed a consensus for two rate cuts in 2025. However, the economic backdrop has since grown more complex.
Fed officials are now weighing not only inflation data but also intensifying global uncertainties, including US trade policy shifts and the escalating Israel–Iran conflict. These factors could heavily influence both inflation and growth trajectories.
While cooler CPI prints may give the Fed room to be patient, the impact of rising tariffs and geopolitical risk keeps the outlook clouded.
Many economists expect the Fed to stick with its projection of two rate cuts in 2025, but emphasize that more time and data are needed before any policy shifts.
What to expect from Powell?
Fed Chair Powell is likely to deliver a hawkish message, said QCP Capital in a Wednesday note, adding that the central bank would flag fresh inflationary risks from mounting geopolitical disruptions.
“The market currently prices in two rate cuts in 2025 and two more in 2026. However, our base case is that the Fed may adopt a more cautious tone in its SEP, potentially indicating a single rate cut for 2025, in contrast to market pricing,” QCP Capital noted.
Analysts said that if the Fed signals less easing than expected, it could reduce expectations for future liquidity, putting downward pressure on risk assets such as Bitcoin.
Bitcoin is trading at around $104,800 at the time of reporting, TradingView data shows.
Even with current challenges, some analysts believe that structural macro trends and growing institutional participation will lead to renewed strength in digital assets by 2025.
Analysts note that if the Fed does cut rates later this year, potentially in Q3, it could trigger an overall rebound, especially in crypto ETFs and institutional flows.
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