The Federal Reserve will maintain interest rates without change, assessing the impact of import tariffs on President Donald Trump. The US Central Bank prefers to wait before taking preventive action on cuts.
Derek Tang, economist at LH Meyer/Moentary Policy Analytics, believes President Jerome Powell is “looking at major awards: looking at sustainable price stability.” “It’s true, we don’t intend to put a safety network in a recession that’s not yet happening,” he added.
According to Tan’s opinion, The Fed won’t cut interest rates for the rest of 2025. This aims to ensure that “long-term inflation expectations are very stable.” “The question is how long they can be,” he explained.
Central bank officials publicly ruled out cuts, given the possibility of a slowdown in the economy caused by tariffs. The priorities focus on curbing inflation and preventing consumers’ expectations of price increases.
“Given the fundamental importance of maintaining long-term inflation expectations, the impulse for short-term inflation created by tariffs, the impulse for short-term inflation produced by tax rates is high, even before the likelihood of increased economic weakness and unemployment increases.”
His comments came on Wednesday, after Powell reaffirmed the Fed on Friday. There is no need to act in trouble when analyzing the impact of government trade policies.
But Trump softened his policy on Wednesday and suspended tariffs on all countries he implemented except China. This turn gave the stock market an impulse, giving Bitcoin (BTC) and cryptocurrency.
Beth Hammack, president of the Federal Reserve Bank of Cleveland, supported a pricing caveat strategy. “It’s our very positive decision. We really need to see where things are being directed,” he said. “I want to wait and move in the right direction to move quickly in the wrong direction.”
Other officials, including Federal President Dallas, Rory Logan, and Kansas City federal leader Jeff Schmidt, were following this look. Schmidt warned that central banks “have to balance inflation risks with concerns about growth and employment.”
The Fed’s position will affect the market
The decision not to cut fees at this time reduces financial stimulus. It will be difficult to raise actions and other risky assets. In this sense, Bitcoin is often considered within this category due to its high volatility, and therefore could be affected by this lack of liquidity shock by the Fed.
However, if investors recognize that tariffs and inflation undermine trust in the dollar and central banks, it could strengthen Bitcoin appeals as a shelter. This is considered “digital gold” given the decentralized mining and half supply is rare.
In this scenario, the prices of active gold, which have historically risen during periods of macroeconomic uncertainty, reached a new record. Bitcoin, on the other hand, has fundamental similarities with this asset, but is correlated with US behavior.
Bitcoin and Action will undergo a correction phase of the historic maximum marked this year. However, BTC even backed up at a price that was not seen in four months, but the bag was kept to a minimum in over a year. As reported by Cryptootics, This better resistance maintains bullish expectations Among some experts.
Bitcoin currently cites around $80,000 (USD), 26% less than the previous maximum of US$109,000 registered on President Trump’s assumption date on January 20th.
Trump changes tariff strategy
The new Trump plan to suspend import rates means lowering the average US tariff ratenot a large scale. According to Bloomberg estimates, it means that it will decrease from 27% to 24%.
“If we understand it well, the final announcement changes many tariff rates across countries, but only the US average rate decreases. This is historically at a high level,” said economists Lana Sajedi and Maeva cousin Tom Olik.
The underlying inflation fell in 2.8% in March, but tariff policies are feared to stem from a combination of increased inflation and lower economic growth. Therefore, until these expectations are disarmed, Interest rates are expected to remain high domesticallyas shown below.
The economic power ratio comes unchanged to the past three Fed decisions made in January, February and March 2025. This remains at 4.5% per year. This is the biggest in 20 years after receiving three consecutive cuts from the 5.5% level last year.
(TagStoTranslate)Central Bank (T)Bitcoin (BTC) (T)Economics (T)Latest Prices and Trades
