The Federal Reserve announced last night that it would maintain the benchmark interest rate at 5.25% – 5.5%, marking the fifth consecutive month of rate stability. Additionally, the dot plot of Fed officials indicates that there will be three interest rate cuts this year, although the specific timing cannot be disclosed. According to the indicator from FedWatch, the market currently expects a 75% probability of the first rate cut occurring during the Federal Reserve’s policy meeting on June 11th to 12th.
Earlier reports on CPI and PPI in January and February had raised concerns in the market about the possibility of a delayed rate cut by the Federal Reserve. However, during last night’s press conference, Federal Reserve Chairman Powell stated that these reports did not change his view on inflation, as he believes that inflation is gradually decreasing. Furthermore, Powell stated, “We believe that the policy rate may be at the peak of this cycle, and if the economy develops as expected, it will be appropriate to start easing policy at some point this year. However, if deemed appropriate, we intend to keep the current target range for the federal funds rate for a longer period.”
Following the conclusion of the meeting, risk assets including US stocks and cryptocurrencies began to rebound. Bitcoin surged back to $68,000, while Ether regained its losses from yesterday and returned to $3,500.
