Key Points
- Bitcoin’s price remains steady as the U.S. Federal Reserve maintains current interest rates.
- The economic outlook is uncertain, with expectations of a rate cut by July 31, 2024.
Bitcoin Price and Federal Reserve’s Decision
The price of Bitcoin (BTC) showed little change after the U.S. Federal Reserve decided to maintain the current interest rates.
The Federal Open Market Committee (FOMC) kept the benchmark federal funds rate in the current range of 5.25% to 5.50%. This decision aligns with most analysts’ predictions and marks the first rate pause in 2024.
Uncertain Economic Outlook
The central bank stated that they do not foresee reducing the target range until they gain more confidence that inflation is moving sustainably towards 2%.
The FOMC statement highlighted the uncertainty of the economic outlook and the committee’s attentiveness to inflation risks. Despite this, job gains have remained strong, unemployment rates low, and inflation has eased but remains elevated over the past year.
The market now expects at least one rate cut by the July 31, 2024, FOMC meeting and rates to be about 50 to 100 basis points lower by the end of 2024.
Despite the relatively flat price action, Zach Pandl, Grayscale Managing Director of Research, suggests that upcoming conditions could support Bitcoin’s price. He believes that a soft landing for the economy, Fed rate cuts, and a contentious presidential election could provide a supportive macro backdrop for Bitcoin.
Ruslan Lienkha, YouHodler Chief of Markets, also maintains a positive outlook for Bitcoin. He views the recent correction as the digital asset “taking a breather” ahead of Fed Chair Jerome Powell’s speech. Lienkha believes that now is an opportunity for long-term investors to accumulate their position.
