The US Federal Reserve has decided to maintain interest rates at the current range of 5.25% to 5.5%, as announced on March 20. This decision aligns with market expectations and helps alleviate concerns of a more aggressive tightening of monetary policy.

Furthermore, the Federal Open Market Committee (FOMC) has upheld its projection for a rate cut within the year, signaling a cautious yet optimistic view of the economy’s future.

Fed chair Jerome Powell’s anticipated speech led to a rebound in the crypto market, with Bitcoin (BTC) trading at $68,032, up 6.52% from earlier lows. Other tokens also experienced gains, with some, like Pepe (PEPE) and Bitcoin Layer-2 Stacks (STX), seeing increases of over 20%.

This positive momentum in the market could potentially bring it back to previous highs sooner than anticipated, despite initial bearish sentiment leading up to the FOMC meeting.

In light of recent high Consumer Price Index (CPI) and Producer Price Index (PPI) reports, concerns about inflation gaining momentum arose. However, the Fed’s decision to maintain financial conditions could pave the way for interest rate cuts as per the FOMC’s projections.

The Fed’s policymakers also revised their economic forecasts, upgrading the US growth outlook for this year. This adjustment indicates a more positive outlook on the economy’s resilience and growth potential.

Despite this, the inflation outlook remains a challenge, with the headline inflation forecast holding steady while the core inflation projection has slightly increased. The Fed’s decision comes after a series of policy actions since March 2022 aimed at addressing rising price pressures.

Market participants were previously expecting the first rate cut in June, but following the FOMC announcement, the probability of a rate cut by June has increased to 70% according to the CME FedWatch Tool data.

At the time of the press, Bitcoin is up 7.06% in the past 24 hours, with a market capitalization of $1.34 trillion and a 24-hour trading volume of $68.48 billion. The total crypto market is valued at $2.56 trillion with a 24-hour volume of $171.73 billion and a Bitcoin dominance of 52.28%.


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