Bitcoin, Ethereum, XRP Surge As Fed Holds Interest Rates Steady

The Federal Reserve kept its benchmark interest rate steady for a second consecutive meeting, signaling concerns about slower economic growth and persistent inflation pressures. While the central bank opted not to raise borrowing costs further, it also adjusted its balance sheet policy, a move that drew internal dissent. Ahead of the announcement, the cryptocurrency market showed renewed optimism as prices of major cryptocurrencies surged. At the time of publication, Bitcoin was up 4% in the past day at $84K. Ethereum has gained 8%, trading at $2,034, while XRP is leading the surge after soaring 10% to $2.47 in the same period.Data from CoinmarketCap shows that ether (ETH), Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) are already experiencing a price rally ahead of the FOMC meeting. While such fluctuations might alarm equity or forex traders, they are well within the normal range for digital assets. Market ReactsAs the Federal Reserve signals its stance on future monetary policy, investors remain uncertain about how markets will react. The FOMC meeting will provide insight into interest rates, economic growth, and inflation expectations. Market observers widely anticipate that the central bank will keep its benchmark borrowing rate steady. Additionally, the Fed may indicate the conclusion of its quantitative tightening program, which has been implemented to reduce the central bank’s balance sheet.Despite this expected stability, implied volatility indices from Volmex predict notable short-term price movements for major cryptocurrencies. As of 12:30 UTC, the bitcoin volatility index suggested a 24-hour price swing of 3.31%, while ether and Solana signaled even larger expected moves at 5.25% and 5.73%, respectively.Although the Fed is not expected to make immediate changes to interest rates, its guidance on future rate cuts remains crucial. Officials could maintain their previous outlook of two rate reductions in 2025, adjust that number, or—less likely—introduce additional cuts. Investors will be scrutinizing the central bank’s messaging for any hints about future monetary policy shifts. In addition to interest rates, the Fed’s new economic projections will shed light on GDP growth, unemployment, and inflation expectations.Market Reactions and Future Uncertainty In December, the central bank forecast inflation at 2.5% for 2025 and GDP growth at 2.1%. Given recent economic data, there is speculation that the Fed may raise its inflation outlook while lowering its growth expectations.Investors remain divided on how the Fed’s decision will impact risk assets. Major stock indices are hovering near correction territory, and traders expect the first rate cut no earlier than June. With uncertainty surrounding economic growth, inflation, and future rate moves, the FOMC meeting will play a pivotal role in shaping investor sentiment. For crypto traders, the short-term volatility might be significant, but in the broader context of digital asset markets, it remains business as usual. This article was written by Jared Kirui at www.financemagnates.com.

Mar 19, 2025 - 19:25

Bitcoin, Ethereum, XRP Surge As Fed Holds Interest Rates Steady

The Federal Reserve kept its benchmark interest rate steady for a second consecutive meeting, signaling concerns about slower economic growth and persistent inflation pressures. While the central bank opted not to raise borrowing costs further, it also adjusted its balance sheet policy, a move that drew internal dissent.

Ahead of the announcement, the cryptocurrency market showed renewed optimism as prices of major cryptocurrencies surged. At the time of publication, Bitcoin was up 4% in the past day at $84K. Ethereum has gained 8%, trading at $2,034, while XRP is leading the surge after soaring 10% to $2.47 in the same period.

Data from CoinmarketCap shows that ether (ETH), Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) are already experiencing a price rally ahead of the FOMC meeting. While such fluctuations might alarm equity or forex traders, they are well within the normal range for digital assets.

Market Reacts

As the Federal Reserve signals its stance on future monetary policy, investors remain uncertain about how markets will react. The FOMC meeting will provide insight into interest rates, economic growth, and inflation expectations.

Market observers widely anticipate that the central bank will keep its benchmark borrowing rate steady. Additionally, the Fed may indicate the conclusion of its quantitative tightening program, which has been implemented to reduce the central bank’s balance sheet.

Despite this expected stability, implied volatility indices from Volmex predict notable short-term price movements for major cryptocurrencies. As of 12:30 UTC, the bitcoin volatility index suggested a 24-hour price swing of 3.31%, while ether and Solana signaled even larger expected moves at 5.25% and 5.73%, respectively.

Although the Fed is not expected to make immediate changes to interest rates, its guidance on future rate cuts remains crucial. Officials could maintain their previous outlook of two rate reductions in 2025, adjust that number, or—less likely—introduce additional cuts.

Investors will be scrutinizing the central bank’s messaging for any hints about future monetary policy shifts. In addition to interest rates, the Fed’s new economic projections will shed light on GDP growth, unemployment, and inflation expectations.

Market Reactions and Future Uncertainty

In December, the central bank forecast inflation at 2.5% for 2025 and GDP growth at 2.1%. Given recent economic data, there is speculation that the Fed may raise its inflation outlook while lowering its growth expectations.

Investors remain divided on how the Fed’s decision will impact risk assets. Major stock indices are hovering near correction territory, and traders expect the first rate cut no earlier than June.

With uncertainty surrounding economic growth, inflation, and future rate moves, the FOMC meeting will play a pivotal role in shaping investor sentiment. For crypto traders, the short-term volatility might be significant, but in the broader context of digital asset markets, it remains business as usual. This article was written by Jared Kirui at www.financemagnates.com.