Fed holds interest rates steady at 5.50%

On Wednesday, the BTC price analysis showcased low volatility after the US Federal Reserve announced its fifth interest rate decision. During the Jerome Powell speech, no significant move was observed, but a slight decline remained due to the prevailing bearish momentum.

Fed Holds Rates Steady in July 2024

On July 31, 2024, the U.S. Federal Reserve revealed its most recent interest rate decision after a two-day Federal Open Market Committee (FOMC) meeting. The central bank opted to keep the federal funds rate steady at 5.25% to 5.50%, meeting market expectations. This decision continues a trend of maintaining rates, following a series of significant hikes that started in March 2022 to address inflation.
Holding rates steady can bolster investor confidence, as it indicates a measured response to current economic conditions rather than a sudden shift in monetary policy.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

During Federal Reserve Chair Jerome Powell’s speech on Wednesday, Bitcoin's price held steady at approximately $66,000. However, soon after, supply pressures reemerged in the crypto market, causing Bitcoin to drop over 2% to $64,750, with its market capitalization falling to $1.278 trillion.
This decline represents a notable change in Bitcoin’s price trajectory, occurring at the resistance level of the broadening wedge pattern. This chart pattern, marked by diverging trendlines, has been shaping Bitcoin's consolidation trend for the past four months.

Asian Markets After Fed Rate Decision

Asian traders see a broadly positive day for stocks in the region, tracking gains on Wall Street, after Federal Reserve Chair Jerome Powell said officials may cut interest rates “as soon as” September.
Regional currencies may also benefit as the prospect of Fed easing weighs on the dollar. The yen surged to the strongest since March versus the greenback Wednesday after the Bank of Japan raised interest rates and announced plans to cut bond purchases. The currency breached the 150-per-dollar level, extending an advance that began earlier this month in anticipation of a hawkish decision by the central bank.

With expectations of three U.S. interest rate cuts by year-end, the dollar/yen exchange rate could dip to the low 140s. However, achieving a stronger yen beyond the 140 level will likely require additional factors, such as a risk-off environment.
While Chairman Powell did not explicitly commit to a September rate cut during his press conference, his remarks suggested that he views it as the most likely scenario. Monitoring the labor market's performance and the actual implementation of three rate cuts by year-end will be crucial in determining the future trajectory.

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