Will the Federal Reserve cut interest rates in 2025? There is a lot of disagreement in the market right now; some believe there will be at least two cuts, while others think there may not be any at all! Let me share my thoughts and also discuss the impact on the cryptocurrency market.

1. Inflation is still the biggest variable

Currently, the U.S. CPI has dropped to 2.3%, which seems okay, but core inflation is still at 2.8%, and Trump's tariff policy might start pushing prices up from May, potentially causing inflation to rebound to over 3% in the second half of the year. If that happens, the Federal Reserve may not dare to easily cut rates, and they might even stay put all year!

2. The job market is starting to feel "off"

Although the unemployment rate has dropped to 4%, many workers' wages haven't increased much, and some are even taking multiple jobs. If the job market really cannot hold up, the Federal Reserve may be forced to cut rates to save the economy, but the question is—will inflation explode again?

3. The Federal Reserve is currently "very hesitant"

Powell's recent speeches have been all about "let's wait and see," showing a reluctance to take action. Internal officials are also in a heated debate; some believe there can only be one cut this year, while others insist on two. Market expectations have already been slashed from four cuts at the beginning of the year to two, and some are even betting on "zero cuts!"

4. Tariff policies may cause disruptions

Although the trade war between China and the U.S. has eased somewhat, a 13% tariff rate is still high, making imported goods more expensive, and wages might rise accordingly, increasing inflationary pressure. If the economy is dragged down by tariffs, the Federal Reserve might be forced to cut rates, but if inflation surges first, they will have to maintain high rates.

5. Impact on the cryptocurrency market

If there is one rate cut (for example, in December): the market won't be too excited, Bitcoin may see a slight rebound, but won’t surge significantly.

If there are two rate cuts: risk assets (BTC, ETH) may experience a wave of increases, especially with liquidity improving towards the end of the year.

If there are no cuts at all: then the market may cool off for a while, funds might continue to wait and see, and the cryptocurrency market may experience short-term fluctuations and declines.

What’s my conclusion?

As it stands, the likelihood of one rate cut seems greater, but the key will be looking at the Federal Reserve's dot plot and inflation data in June. If inflation cannot be contained, there may not be any cuts at all! It’s best not to go all in on cryptocurrencies right now and wait for clearer signals.

What do you think? How many times will the Federal Reserve cut rates this year? Will Bitcoin be affected? Let's discuss in the comments section! #降息预期