According to the Federal Reserve's interest rate meeting on June 19, 2025, and the speech by Federal Reserve Chairman Jerome Powell, here are the main results and an analysis of their impact on the cryptocurrency market:
Results of the Interest Rate Meeting
1. Interest Rate Decision: The Federal Reserve decided to keep the federal funds rate unchanged in the range of 4.25%-4.50%, in line with market expectations. No rate cuts in June and July, while the dot plot indicates two expected rate cuts in 2025 and one in 2026, reducing the expectation for one rate cut in 2026 compared to the March dot plot.
2. Economic Forecast and Policy Stance:
• The Federal Reserve reiterates that monetary policy remains 'moderately restrictive,' and rate cuts require more evidence of sustained declines in inflation.
• The dot plot shows that the expectation of rate cuts in 2025 remains unchanged, easing market concerns about a more hawkish policy and driving up the probability of a rate cut in September.
• The Federal Reserve acknowledges that geopolitical conflicts and tariff policies (such as the tariffs imposed by the Trump administration) may raise inflationary pressures, but believes that the impact of short-term factors like oil prices is limited, and the U.S. economy remains resilient.
3. Balance Sheet Reduction Plan: The Federal Reserve plans to further slow the pace of balance sheet reduction starting in April, reducing Treasury bond holdings from $25 billion to $5 billion per month, while the pace of MBS reduction remains unchanged.
Key Points from Powell's Speech
• Inflation and Tariffs: Powell stated that tariffs imposed by the Trump administration could lead to rising inflation in the coming months, but he emphasized that the Federal Reserve needs sufficient confidence in a decrease in inflation before cutting rates.
• Economic Resilience: Powell believes the U.S. economy and labor market remain resilient, and current data do not indicate an urgent need for rate cuts, with policy remaining flexible to respond to uncertainties.
• Neutral Tone: The overall tone of the speech is neutral, reaffirming a data-driven approach to decision-making, avoiding excessive volatility in market expectations.
Impact on the Cryptocurrency Market
1. Nature of the Message: Overall, it is neutral to slightly bearish.
• Negative Factors:
• No rate cuts in June and July, liquidity did not further loosen in the short term, limiting speculation in the crypto market about rate cuts.
• The expectation that tariffs will drive up inflation may lead the Federal Reserve to maintain high interest rates longer, putting pressure on risk assets (such as Bitcoin and Ethereum).
• Bitcoin has recently tested the $100,000 level multiple times, and Ethereum has been fluctuating around $2,500, with cautious market sentiment; Powell's speech may trigger short-term volatility (such as 'small spikes').
• Positive Factors:
• The dot plot maintains the expectation of two rate cuts in 2025, which is better than some pessimistic predictions, with the probability of a rate cut in September increasing, boosting mid- to long-term market confidence.
• The Federal Reserve's neutral tone did not tighten policy further, alleviating market concerns about 'stagflation,' and risk assets were not severely impacted in the short term.
2. Market Reaction:
• The crypto market may remain volatile in the short term. Bitcoin (BTC) did not experience significant declines after the meeting, partly because the bearish sentiment had been released in advance.
• The market is starting to speculate on the expectation of a rate cut in September, focusing on the fourth quarter's market trends, but caution is needed regarding short-term volatility triggered by Powell's speech.
3. Long-Term Impact:
• If inflation remains high due to tariffs, the Federal Reserve may delay rate cuts, and the cryptocurrency market may face prolonged pressure.
• Conversely, if economic downward pressure increases, the Federal Reserve may cut rates earlier, which would be beneficial for the crypto market.
Summary
The results of the June 19 interest rate meeting and Powell's speech are neutral, leaning slightly bearish for the cryptocurrency market in the short term, as no rate cuts and tariffs driving up inflation expectations may suppress the performance of risk assets. However, the expectation of rate cuts in 2025 remains unchanged, and the probability of rate cuts in September is rising, indicating that the market still has rebound potential in the long term.
