Yesterday, one of the most anticipated Fed meetings took place. As expected, the rate was decided to remain unchanged, despite a series of weak inflation reports.
💬Powell spoke calmly, without harsh signals:
🔸Trump's elevated tariffs could reignite inflation — and the Fed is already factoring this into its forecasts.
🔸 The labor market is still strong, so there is no reason to rush to cut rates.
🔸 According to him, 'it's better to wait a couple of months to make a more reasonable decision.'
🟢But an important point:
The Fed still maintains the forecast of two rate cuts in 2025 by 50 basis points.
This means that the rate could indeed go down — if an economic slowdown begins or recession risks appear.
And this is important because the markets are still living with the expectation of a shift in monetary policy 📉.
📉Economic forecasts have worsened:
📌Inflation (core PCE) for 2025 — 3% (up from 2.8% previously).
📌GDP has been lowered to 1.4%.
📌Unemployment is expected to be higher — 4.7% in 2025.
📍All of this is a result not only of tariffs but also of geopolitics.
🛢️Powell separately noted that he is monitoring the conflict in the Middle East, and the rise in energy prices due to Iran and Israel may impact inflation. For now, this is referred to as a 'local factor,' but in the event of escalation, the situation could quickly spiral out of control.
📈For the crypto market:
💼A delay in rate cuts may slightly slow growth in the short term.
💼However, the expectation of a softening of monetary policy in 2025 remains — and this is key to growth.
💼In the event of a Middle East escalation or a dollar decline, crypto may start to move upwards again as a safe haven asset.
