FOMC Decision Recap:
> Federal Reserve holds rates at 4.25%–4.50%, marking the fifth consecutive hold in 2025.
> Two governors dissented, calling for a 25bps cut. This was the first dissent since 1993.
> Powell described policy as “modestly restrictive”, citing persistent inflation (2.7%) and tariff uncertainty driving price pressures.
Crypto Market Reaction:
> Bitcoin dropped nearly 2%, dipping to ~$118K before rebounding to ~$117.1K post-Fed.
> Ethereum, XRP, SOL, DOGE each fell 3–4%, signaling a broader altcoin pullback.
> Volume and open interest declined, pointing to short-term risk-off positioning.
Why This Really Matters:
Eyes on Powell’s Tone, Not Just the Rate: Powell’s lack of endorsement for a September cut lowered market expectations—September rate-cut probability fell from ~63% to 45%.
Fed Independence vs. External Pressure: Despite political pressure (e.g. Trump), the Fed stuck to data-driven decisions, reinforcing its credibility.
Macro Uncertainty Still High: Tariffs effective Aug 1 and weak growth signal rate cuts may be delayed if inflation stays stubborn.
🚀 Crypto Reactions to Watch:
📌 If Powell turns dovish next month
➡ Bitcoin could reclaim $120K
➡ Ethereum targets $3,900+
➡ Altcoins could rally hard
📌 If Fed stays neutral or hawkish
➡ BTC may consolidate between $116K–$118K
➡ ETH likely to trade sideways near $3,700
➡ Lower-cap coins may bleed temporarily
📌 If inflation surprises again
➡ September rate cut hopes die
➡ Crypto sentiment weakens
➡ Expect higher volatility across the board
Quick Summary:
The Fed held rates steady as expected—but Powell’s cautious tone and no clear cut signals triggered short-term crypto volatility. This isn’t a breakdown, just a healthy retest.
Eyes now shift to August CPI, global trade headlines, and future Fed speeches for the next big move.
DYOR • Not Financial Advice
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