2025-3-20 18:59 |
Crypto traders will watch Jerome Powell’s speech, which occurs after the FOMC meeting on March 19, to ascertain the state of the national economy, whether interest rates will be cut further, and to get a general impression as to the Fed’s outlook for the future of crypto regulation. The trade war between America, China, and Canada has introduced uncertainty into the markets and created volatility in the Bitcoin market.
Powell will release a new policy statement at 2 p.m. Eastern Standard Time (ET). The Fed is expected to leave interest rates in the range of 4.25% to 4.50%. Powell’s speech may address Trump’s economic policies and how they fit in with the Fed’s outlook, whether they complement the Fed, and how fiscal policy affects the balance of unemployment and inflation.
Bitcoin has fluctuated around the $80k level, possibly awaiting further economic data to price into the market. With the Fed speech, it may drop dramatically if there is a hint that interest rates will be maintained for a longer period of time.
Higher interest rates traditionally benefit conservative investments such as bonds, savings, and stablecoins—riskier assets, such as Bitcoin, maybe a less favorable choice during high interest rates. However, more money may be available during a rate cut to take on riskier investments such as cryptocurrency, Decentralized Finance (DeFi), and meme coins.
A rate cut, however, could be done to offset the negative effects of Trump’s tariffs, prematurely cutting interest rates, not to get inflation down to the Fed’s target of 2%, but rather to address the trade war and supply chain disruptions.
The February U.S. retail sales report, particularly the weaker-than-expected numbers, would be a key piece of data considered by the Fed. For example, spending for optional categories, such as eating out at restaurants, indicates financial hardship for consumers across the board, something that the Fed will consider when deciding later today.
Timetable for FOMC:
March 19, 2025
Description: interest rate announced and economic projection revealed.
Policy decision time: 2 p.m. ET
Powell’s decision time: 2 p.m.
Powell’s press conference: 2:30 p.m.
In September 2024, inflation dropped to 2.4%, the lowest it had been in over three years. In response to the drop, the Fed lowered the interest rate from 5.3% to 4.3%. The Fed had aggressively raised interest rates to bring down inflation, but when there were clear signs that the economy was recovering, the Fed started to lower the rate, providing relief to Americans suffering under the higher rates.
In late 2024, after the rate cut, inflation increased again, four months in a row, until falling again to 2.8% in February. Powell is in wait-and-see mode as he weighs up the impact of Trump’s policies on the market.
Bitcoin sustained a large drop in price due to market uncertainty and high interest rates. The cryptocurrency market suffered nearly a trillion-dollar loss in just a few days. A rate cut, therefore, may signal higher levels in the Bitcoin price.
Traders will watch Powell’s speech at 2:30 p.m. ET, viewed on YouTube or the Fed’s website. There has already been positive news coming from Trump’s administration, promoting a crypto reserve, White House crypto summit, promises of reasonable regulation, crypto-friendly tax reform, freeing Silk Road founder Ross Ulbricht, hiring a crypto csar, canceling the war on crypto, and dropping SEC lawsuits against crypto businesses. One really must wonder why Bitcoin is not booming at such a time. A favorable Fed decision may be the one thing crypto traders are waiting for, signaling a real economic recovery.
Retail sales rose moderately after a sharp fall in January. Large and small retailers have noticed a lack of enthusiasm from consumers, suggesting that people are still struggling financially and cannot spend too much money. Homebuilders expect costs to increase and sales to decrease as a result.
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