[NEWS] Fed Chairman Powell says interest rate cut in March is "probably not going to happen" Bitcoin and other cryptocurrencies also fall

At the Federal Open Market Committee (FOMC) meeting held on January 30-31, Chairman Jerome Powell decided to keep the key policy interest rate unchanged. This will be the fourth consecutive meeting to keep interest rates unchanged.

On the other hand, Chairman Powell suggested that the possibility of implementing an interest rate cut in March of this year is low. This poured cold water on investors hoping for an early start to cut interest rates. In response, the cryptocurrency market was also affected, with Bitcoin (BTC) temporarily falling below $43,000 (about 6.3 million yen).

Market participants are closely watching when the Fed will start cutting interest rates. Many analysts had expected the Fed to cut interest rates at its next meeting in March. In a statement after the meeting, the committee wrote, "The committee does not believe that it will be appropriate to lower the target range until it is confident that inflation is moving sustainably toward 2 percent," arguing that there is no need to rush into cutting interest rates.

"Not likely" to start cutting interest rates in March

At a press conference after the meeting, Chairman Powell said, "Given today's meeting, I do not believe the Committee will reach a level of confidence that would identify March as the time to start cutting interest rates. Of course, that remains to be seen. (A cut in March is) what we call the most likely case, or base case, but it is probably not likely."

He added, "We believe that the policy rate is likely at the peak of this tightening cycle, and if the economy develops broadly as expected, it is likely that it will be appropriate to return to a more accommodative policy. If we judge it appropriate, we are prepared to maintain the current target range for the federal funds rate for an extended period of time."

Chairman Powell strongly expressed his negativity towards a cut in interest rates in March. Immediately after this statement, many risk assets, including cryptocurrencies, fell. In addition to Bitcoin, altcoins such as Ethereum (ETH), Avalanche (AVAX), and Solana (SOL) have also seen significant declines.

According to the CME Fed Watch Tool, the probability of a rate cut in March has been lowered from about 65% to 34.5%.

Reference:Announcement
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