Fed keeps interest rates unchanged, Bitcoin recovers to $87,400

The US Federal Reserve (Fed) has decided not to adjust interest rates for the second time in a row, helping the cryptocurrency market breathe a sigh of relief after a series of declines.

According to the announcement published in the early morning of March 20, 2025, the US Federal Reserve (Fed) said that the Federal Open Market Committee (FOMC) decided to maintain the federal funds rate at 4.25-4.5%, unchanged from the two meetings in December 2024 and January 2025.

The Fed representative affirmed that the US economy is still growing at a stable pace, the unemployment rate has decreased to the low level of the past few months, but the inflation situation has not yet been brought back to the Fed's expected target - the main reason why the Federal Reserve has not resumed the interest rate cut trend.

The US Federal Reserve also slowed down the pace of quantitative tightening, saying it would reduce the amount of bonds sold each month from $25 billion to just $5 billion, but still maintain the ceiling on mortgage-backed securities purchases at $35 billion.

In addition, the FOMC said that uncertainties about the economic outlook have increased in recent times, forcing the committee to be more cautious in using available tools to influence the economy. Although not directly mentioned, this could be an allusion to the tariffs that Trump is currently and will impose on Canada, Mexico, China and the EU, raising the risk of a trade war and pushing the US economy into recession.

In a press conference after the decision to keep interest rates unchanged, Fed Chairman Jerome Powell said that the purchasing power of US consumers has changed slightly, and commented that upcoming tariffs could put pressure on prices.

JUST IN: 🇺🇸 Fed Chair Jerome Powell says inflation is rising partially due to President Trump's tariffs. pic.twitter.com/BY67H2gli9

— Watcher.Guru (@WatcherGuru) March 19, 2025

The Fed also kept its projection of only two 0.25% rate cuts in 2025, focused on the second half of the year. The Fed's next rate adjustments will take place in May, June, July, September, October and December.

The Fed's stance also reflects the uncertainty that Wall Street and financial markets have felt since Mr. Trump took office and made many policy decisions that went against the expectations of the majority.

President Trump on the morning of March 20 once again called on the Fed to cut interest rates, declaring that this was the right thing to do.

NEW: U.S. PRESIDENT TRUMP SAYS “THE FED WOULD BE MUCH BETTER OFF CUTTING RATES AS U.S. TARIFFS START TO TRANSITION (EASE!) THEIR WAY INTO THE ECONOMY. DO THE RIGHT THING” pic.twitter.com/mesbEfBwKz

— DEGEN NEWS (@DegenerateNews) March 20, 2025

Following the Fed's announcement, major US stock indexes all posted slight gains, partially erasing losses recorded in February and March.

Mar 19, 2025

• Stocks rose after the Fed's rate decision.

• The Fed held rates steady and projected two rate cuts for 2025.

• Fed Chair Powell said the U.S. economy remains strong. https://t.co/27VVHKHuAH pic.twitter.com/sU7w0YgCAq

— Brew Markets (@brewmarkets) March 19, 2025

Similarly, Bitcoin price has had a slight recovery from the $84,000 region to $87,400 - the highest price since March 8, with green spread across the crypto market.