Bitcoin (BTC) surged past $99,000 for the first time in nearly three months after the U.S. Federal Reserve held interest rates steady, defying public pressure from President Donald Trump to ease monetary policy.
Fed Holds Rates, Cites Inflation and Unemployment Risks
At the conclusion of the May 7 FOMC meeting, Fed Chair Jerome Powell announced that interest rates would remain in the 4.25%–4.50% range. He warned that elevated risks of both inflation and unemployment remain, despite signs of economic resilience.
“Inflation has come down a great deal but is still running above our 2% longer-term objective,” Powell stated, adding that recent sentiment declines among households and businesses were largely due to concerns about Trump’s aggressive trade policies.
Despite Trump’s recent threat to remove Powell for being “too late” in cutting rates, the Fed emphasized caution, noting that the U.S. labor market remains “at or near maximum employment.” Current projections expect the Fed funds rate to decline to 3.6% by year-end.
Bitcoin Volatility Follows Fed Decision
Shortly after Powell’s remarks, Bitcoin dropped briefly to $95,866, but quickly rebounded — tapping $98,000 within hours and later climbing to $99,049 at the time of writing. This marks Bitcoin’s highest level since February 21.
ETF Inflows and Greed Sentiment Boost Bitcoin Momentum
Bitcoin’s recovery comes amid growing bullish sentiment. The Crypto Fear & Greed Index has returned to “Greed” territory, while spot Bitcoin ETFs have seen $4.41 billion in inflows since March 26, reflecting renewed institutional interest.
Analysts suggest this move could be the beginning of another leg up for BTC. Historical patterns show that prolonged rate pauses followed by liquidity injections tend to benefit scarce assets like Bitcoin.
What Comes Next?
Bitcoin’s reaction to the Fed’s pause underscores its role as a macro-sensitive asset. Analysts remain divided — with some predicting a new all-time high if BTC breaks $100,000, while others, like economist Timothy Peterson, warn that a delay in rate cuts could trigger a market pullback, potentially pushing BTC back toward $70,000.
Still, as long as rate uncertainty lingers and ETF inflows persist, Bitcoin bulls appear firmly in control, according to Cointelegraph.
