Bitcoin has reached $98,000 again for the first time in nearly three months after the US Federal Reserve announced it would keep interest rates unchanged for another month.
The Fed’s decision to hold interest rates steady comes despite increasing pressure from President Donald Trump, who recently threatened to fire Fed Chair Jerome Powell for being “too late” in lowering rates.
Powell stated on May. 7 that the Federal Reserve kept rates in the 4.25% to 4.50% range due to the increasing risks of higher unemployment and inflation.
Powell flags trade policy concerns amid inflation drop
Fed Chair mentioned that inflation has decreased significantly. However, it’s still been above our long-term target of 2% for a while now. He said surveys in households and businesses showed a significant drop in sentiment, mainly due to concerns over Trump’s trade policy.
Powell said that, despite increased uncertainty, the economy remains in a strong position. Before the announcement, data from CME Group’s FedWatch Tool showed that the futures market expected a low chance of a rate cut.
The unemployment rate is still low, and the labor market is either at or close to full employment. The market expects the Fed to reduce the federal funds rate to 3.6% by the end of 2025.
Bitcoin eyes $100K despite rate risks
Bitcoin fell below $97,000 to $95,866 following Powell’s speech. But a few hours later, it surged to $98,000, marking its highest point since Feb. 21.
Bitcoin momentum has been growing, with the Crypto Fear & Greed Index returning to the “Greed” zone and spot Bitcoin ETFs seeing inflows of nearly $4.41 billion since Mar. 26.
On Mar. 9, network economist Timothy Peterson warned that if the Fed delays rate cuts in 2025, it could lead to a broader market downturn, potentially bringing Bitcoin back down to $70,000.
Peterson’s forecast came after Powell’s March statement, “We don’t need to rush and are well-positioned to wait for more clarity.”
