At the latest FOMC (Federal Open Market Committee) meeting held on the 29th, the Federal Reserve (FRB)determined the direction of its monetary policy.
Considering the steady growth of the U.S. economy and inflation trends, the Fed announced that it would maintain the federal funds rate at 4.25%–4.50%. This decision reassured the market about the stability of interest rate policy, leading to an accelerated flow of capital into risk assets, including the cryptocurrency market.
The FOMC statement emphasized that the U.S. economy continues to expand, with the unemployment rate remaining at low levels. However, inflation is still above the 2% target, prompting the Fed to maintain a cautious approach to monetary policy.
Regarding future policy adjustments, the Fed stated that decisions will be based on economic data, reaffirming its cautious stance against abrupt rate cuts or hikes.
During the press conference, Chairman Jerome Powell suggested that the Fed would allow banks to provide cryptocurrency-related services. He expressed support for the expansion of crypto-related banking operations as long as proper risk management measures are in place. Following this statement, Bitcoin surged, briefly reaching $105,000.
In the cryptocurrency market, the Fed's dovish stance was perceived as a bullish factor, encouraging investors' risk appetite.
Additionally, Powell emphasized that future interest rate policies will be flexible and responsive to economic conditions. If inflation continues to decline steadily, there is a possibility of rate cuts within the year. However, market expectations remain divided at this stage.
The future regulatory landscape for cryptocurrencies remains uncertain, and the impact of monetary policy changeson the crypto market will continue to be closely monitored.
Reference: Announcement
Image: Shutterstock
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