On May 8, 2025, the U.S. Federal Reserve maintains interest rates at 4.25%–4.5%, aligning with market expectations. The Fed’s cautious stance was driven by balanced risks to its employment and inflation goals.
Federal Reserve Maintains Interest Rates
- Revised 2025 projections anticipate only two 25-basis-point rate cuts, down from four.
- The inflation forecast for 2025 increased to 2.5% from 2.3%.
- Fed Chairman Jerome Powell emphasized data-dependent rate decisions, citing persistent inflation and a strong economy.
Bitcoin Surpasses $99,000
Bitcoin’s price initially dipped to $96,800 as investors took profits after reaching $108,268 earlier in December. However, it quickly rebounded, surpassing $99,000 within hours, driven by:
- Optimism around a pro-crypto Trump administration, with reports of a potential executive order for a strategic Bitcoin reserve.
- Growing institutional adoption, such as MicroStrategy’s inclusion in the Nasdaq 100.
The broader crypto market also rallied:
- Ethereum rose 4.5% to $3,800.
- Total market capitalization reached $3.53 trillion.
Analysts remain bullish, projecting that Bitcoin could hit $120,000 by early 2025, supported by:
- Favorable crypto policies under the Trump administration.
- Increasing mainstream acceptance of cryptocurrencies.
However, uncertainties persist:
- Trump’s proposed tariffs could drive inflation, potentially influencing future Fed rate decisions.
- Such macroeconomic shifts may introduce volatility to crypto markets.
Despite short-term fluctuations, Bitcoin’s resilience and the market’s positive sentiment underscore its growing role in the financial landscape.
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