- Bitcoin climbed about 2% after the Federal Reserve kept interest rates unchanged.
- The Federal Reserve cited economic uncertainty and maintained its rate between 4.25% and 4.5%.
- Recent U.S. tariffs and ongoing trade talks are adding to inflation and employment risks.
On Wednesday, the Federal Reserve announced that it would keep U.S. interest rates steady, opting not to make changes amid ongoing economic uncertainty and recent tariff developments. The decision, which was widely anticipated, triggered a nearly 2% increase in the price of Bitcoin.
The central bank maintained its target range for benchmark borrowing rates at 4.25% to 4.5% for the fourth consecutive meeting. In its official statement, the Federal Reserve pointed to “heightened levels of economic uncertainty,” as ongoing tariffs imposed by President Donald Trump continued to impact the outlook. The Fed stated that any future rate changes will depend on incoming economic data, the current outlook, and an assessment of risks. The bank noted rising concerns over both higher unemployment and inflation.
Recent indicators, the Fed said, show continued expansion in economic activity, though the full effects of tariff policies are still unfolding. “Although swings in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” the statement read. According to CoinGecko, Bitcoin was trading around $96,000—up 1.5% in the hour following the announcement and about 22% in the past week.
Economists warn the Federal Reserve faces challenges as it tries to gauge the impact of new “reciprocal” tariffs from the Trump administration. These tariffs could push inflation higher or slow economic growth. If rates remain elevated to combat inflation from tariffs, it may reduce consumer spending and increase unemployment.
Despite the negative effects on consumer confidence, the U.S. job market remains strong. The Bureau of Labor Statistics reported that employers added 177,000 jobs in April, and the unemployment rate held steady at 4.2%. Inflation appears to be moving closer to the Fed’s 2% target, with core Personal Consumption Expenditures (PCE)—a key inflation measure that excludes food and energy costs—rising 2.6% year-over-year in March, down from 3% in February.
Market expectations showed a 28% chance of a rate cut at the next Fed meeting in June, according to the CME FedWatch Tool.
Among the tariffs, those on Chinese goods are some of the highest, with rates reaching 145%. The U.S. Treasury Secretary is expected to meet with Chinese officials in Switzerland this week, opening the door to possible de-escalation. In response to tariffs, the People’s Bank of China has adjusted economic policies by lowering bank reserve requirements and reducing interest rates, with additional industry-specific measures outlined on its official website (source 1, source 2).
Investors found relief after President Trump paused most new reciprocal tariffs for 90 days last month, but with a July 8 deadline approaching, many are waiting for further developments in U.S.–China trade negotiations.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- Coinbase Launches x402 Protocol for Direct Stablecoin Payments
- Bitcoin Node Resistance Doubles as OP_RETURN Data Limit Debate Escalates
- Congress Moves Forward on Stablecoin Laws, Yield Blocked by Banks
- Visa Invests in BVNK to Boost Stablecoin Payment Innovation
- Democrats Escalate Probe Into Trump Family’s Crypto Conflicts
