CryptoFOMC Interest Rates Decision 2025: What It Means for...

FOMC Interest Rates Decision 2025: What It Means for Crypto

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January’s wrapping up, and the Federal Open Market Committee (FOMC) is set to kick off 2025 with its first big decision on interest rates.

Maybe Fed Chair Jerome Powell will launch an official $JPOW token on Solana. Obviously.

Jokes aside the FOMC meeting, set to end January 29, has markets bracing for impact—none more anxious than Bitcoin holders, who are eyeing potential aftershocks in the crypto space.

FOMC IN Focus Current Interest Rate Expectations

So far, markets have been all but unanimous under President Donald Trump. The FOMC will keep interest rates locked at 4.25%—4.5% this month, with CME data placing a 99.5% likelihood of no movement.

The real action, however, may come later this year, with inflation softening and key indicators stabilizing. Moreover, rumors of potential rate cuts in spring are growing louder.

(Source)

Government data reflects a mixed bag in 2025. As Fed Governor Lisa Cook noted, employment is still hot, with wage growth comfortably outpacing inflation. Yet inflation seems to be cooling.

December’s CPI shows manageable levels, with core inflation nudging up slightly to 2.9% from 2.4% in September. If the downward trend in price pressures continues, a rate cut may not be far off.

Bitcoin Awaits the FOMC’s Next Move

Federal Reserve Governor Michelle Bowman stood firm against further rate cuts this month, citing stubborn inflation and a resilient economy. “Given the lack of continued progress on lowering inflation and the ongoing strength in economic activity and the labor market, I could have supported taking no action at the December meeting,” she said.

Governor Christopher Waller struck a more hopeful tone, pointing to a slight dip in core PCE inflation to 2.8% and signaling optimism for a continued slide toward the 2% target. “Further reductions will be appropriate if inflation trends toward our 2% goal,” he remarked during his January 8 address.

(Polymarket)

Bitcoin, meanwhile, finds itself wedged between $100,000 and $110,000, as the crypto market holds its breath ahead of the Fed’s next move. Analysts see little action until the FOMC verdict drops. “Assuming no surprises from the FOMC meeting, we are likely to see Bitcoin trading sideways until the end of the month,” said trader Krillin.

We could also see crypto pump off the announcement of a Bitcoin strategic reserve, which some expect to be announced today.

(Source)

The possibility of renewed quantitative easing also looms large. If the Fed revives QE to inject liquidity, high-risk assets like Bitcoin could get a fresh jolt like sticking a fork into an outlet.

The Broader Implications of High Interest Rates

The Fed’s 2025 rate decision won’t just affect Bitcoin—it’s a high-stakes moment for risk assets across the board. A dovish stance could energize equities and tech stocks, while a cautious Fed might leave markets catatonic.

January’s outcome is a placeholder, leaving March and May as the real battlegrounds. The stakes are sharper than ever for Bitcoin, caught between institutional adoption and shrinking liquidity.

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The post FOMC Interest Rates Decision 2025: What It Means for Crypto appeared first on 99Bitcoins.





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