- Fed keeps rates at 4.25 to 4.5 percent for fifth meeting, despite Trump’s push for cuts.
- Fed’s caution stems from tariff-related inflation fears, with focus on Powell’s next speech.
- September meeting has 63.7 percent chance of a 25 basis point rate cut, per CME FedWatch.
Fed Keeps Rates Steady at July Meeting
The Fed decided to hold interest rates at 4.25 to 4.5 percent after its July FOMC meeting, marking the fifth time in a row with no change.
Despite President Donald Trump’s calls for lower rates, the Fed stayed cautious, saying it needs more data before deciding on cuts.
Two governors, Christopher Waller and Michelle Bowman, pushed for a small 25 basis point cut but were outvoted nine to two.
Trump has been vocal, saying the Fed should cut rates to boost the strong economy even more, especially after solid GDP numbers. But the Fed is worried about Trump’s tariffs possibly driving up inflation, so they’re holding off.
Crypto people and markets are now focused on Fed Chairman Jerome Powell’s next speech for hints about future moves, as rate changes can sway Bitcoin and other assets.
Fed Rate Cuts Coming Soon?
Trump said in a briefing he’s heard the Fed might cut rates at its September 16 to 17 meeting. Market data from CME FedWatch backs this, showing a 63.7 percent chance of a 25 basis point cut, lowering rates to 4 to 4.25 percent. There’s also a 44.4 percent chance of another cut in December, but October’s meeting likely won’t see one.
In contrast to the European Central Bank, which has reduced rates on several occasions, the Fed is taking it slow. A rate cut would be huge for crypto, as lower rates tend to make Bitcoin look more attractive than legacy investments.
With FOMC meetings in September, October, and December, the Fed’s next move could be dramatic. Powell’s address will be most important for hints on when cuts are imminent, keeping crypto investors and traders anxiously waiting for what comes next.
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