Bitcoin returns to $98,000 as Fed holds interest rates steady despite Trump’s demands

Bitcoin price fluctuated after the Federal Reserve kept interest rates unchanged but then recovered and reached $98,000 shortly thereafter.

Bitcoin regained the $98,000 level for the first time in nearly three months after the U.S. Federal Reserve announced it would hold interest rates steady for another month.

The Fed’s decision to maintain interest rates was made despite increasing pressure from U.S. President Donald Trump, who just weeks earlier threatened to fire Fed Chairman Jerome Powell for being "too late" in cutting interest rates.

Fed cites risks of unemployment and higher inflation

On May 7, Powell stated that the Federal Reserve's rate-setting committee held interest rates in the range of 4.25% to 4.50% due to increased risks regarding unemployment rates and inflation.

He added that inflation had "decreased significantly but is still above our long-term target of 2%". Powell noted that surveys of households and businesses showed a "sharp decline in sentiment" largely due to concerns over Trump’s trade policy.

However, Powell said that "despite increasing uncertainty, the economy remains on solid footing". In the days leading up to the announcement, data from CME Group’s FedWatch tool indicated that futures markets expected the likelihood of an interest rate cut to be very low.

Powell stated that the unemployment rate remains low and the labor market "is at or near maximum employment". The market expects the Fed to cut the federal funds rate to 3.6% by the end of 2025. #Fed