On Wednesday, March 18th, after the Federal Open Market Committee (FOMC) meeting, the US Federal Reserve (FED) will announce its decision on interest rates. This is a key factor in Bitcoin (BTC) price in the short term and maintains market expectations.
The interest rate currently stands at 3.75% after a 25 basis point cut on December 10th, but at this meeting: The market predicts that interest rates will remain unchanged.
Given this scenario, the message from Chairman Jerome Powell will be in focus. Markets will be looking for clues as to whether the Fed will maintain current interest rates for an extended period of time or adjust its outlook in the face of new inflationary pressures stemming from the Iran conflict and resulting rise in energy prices.
Iran conflict and its impact on inflation
Geopolitics once again complicates the Fed’s outlook. The Iranian conflict has intensified since February 28th. Significant impact on the global economy through energy marketsas reported by CriptoNoticias.
The escalating war between the United States, Israel and Iran has pushed oil prices above $120 per barrel, and has recently stabilized around $100, the lowest level since 2022.
This rise in energy prices could act as a driver of inflation, forcing the Fed to maintain restrictive policy (high interest rates) for a longer period of time than expected.
In this scenario, Polymarket’s prediction market reflects what will happen, even though figures such as US President Donald Trump are calling for immediate interest rate cuts. There is virtually no chance (0%) of this happening in this week’s meeting.we are betting 100% on rate stability.
Bitcoin faces financial instability
The relationship between interest rates and Bitcoin is direct. Prices work like a seesaw. Lower interest rates will lower the price of credit, prompting investors to turn to assets deemed “risky” such as BTC in search of higher returns. Conversely, expectations of higher interest rates typically slow upward momentum..
Bitcoin has been a solid performer despite the FED wariness. On this day, it exceeded $74,405, a significant rebound from the $60,000 record recorded on February 5th.
This strength is also reflected in traditional safe assets. According to analyst Michael van de Poppe, Bitcoin’s valuation relative to gold has increased significantly. This suggests that digital assets are becoming established as a store of value in this climate of uncertainty..
For Van de Poppe, optimism is pervasive in the crypto sector. Analysts highlight that range breaks in other major cryptocurrencies such as Ether (ETH) are typically preceded by big market moves, suggesting it is only a matter of time before Bitcoin makes an appearance. Continue to rise towards goal of $80,000As long as the macroeconomic environment allows.
Political factors and the end of the Powell era
This week’s speech also came at a time of political transition. Jerome Powell’s term ends on May 15, 2026, but President Trump has already nominated Kevin Warsh to succeed him and has confirmed that he will not ratify it.
This situation adds further complexity. If Chairman Powell adopts a restrictive tone and warns of sustained inflation from the Iran conflict; Could cause a correction in Bitcoin price.
But the company’s ability to influence markets over the medium term could begin to fade as investors begin to focus on Mr. Warsh’s incoming management team, which is expected to have a broader profile.
For now, the market is focused on the post-announcement press conference, and Powell’s every word will determine whether Bitcoin consolidates its bullish trend or faces a temporary decline.
