The Fed continues to keep interest rates unchanged at 4.25%–4.50% in the July 2025 meeting, in line with market expectations. This move helps maintain stability in the context of ongoing inflationary pressures, but it also pushes back expectations for rate cuts. The Fed's decision to not act immediately shows that they are still waiting for clearer data on inflation and the labor market.
Benefits:
• Avoid shocking the financial markets.
• Maintain a strong position on long-term inflation control.
• Support a stable USD, reducing the risk of capital outflows from the US.
Risks:
• Prolonging the “soft tightening” policy may slow down economic recovery.
• The stock market, crypto, and real estate may face difficulties if interest rates remain high longer than expected.
• Businesses and consumers continue to bear the burden of expensive borrowing.
The impact on the crypto market is slightly negative in the short term due to the delayed expectations of a “Fed pivot,” but if positive data comes in for August–September, the market could rebound strongly when the Fed reverses course.