After Federal Reserve Chairman Jerome Powell did not make a clear statement on interest rate cuts during a press conference on Wednesday, investors lowered their expectations for a rate cut in September.
A cryptocurrency analyst suggested that this could lead to a slowdown in the pace of the cryptocurrency bull market.
The U.S. central bank decided to maintain interest rates at 4.25% to 4.5%, citing uncertainty about the economic outlook, which it stated "remains elevated."
Powell noted that tariff increases are beginning to show up in consumer prices for certain categories of goods. He did not rule out the possibility of maintaining interest rates again at the next Federal Open Market Committee (FOMC) meeting in September, adding that this would depend on economic data over the next two months.
"We have not made any decisions for September, and we will not do so in advance," he said.
"If the unemployment rate remains stable and tariffs push up inflation, it will be difficult to justify a rate cut in the coming months," Comerica Bank Chief Economist Bill Adams told Reuters.
Powell resisted pressure from U.S. President Trump, who called for lower interest rates, maintaining a wait-and-see approach amid growing concerns that the ongoing trade war could reverse the central bank's 2% inflation target.
The current U.S. inflation rate is 2.7%, and it has risen over the past four months.
Powell's comments reduced the probability of a rate cut in September to 40% after the meeting, down from 63% before the FOMC statement.
Nick Ruck, Director of LVRG Research, told Cointelegraph: "If the Fed continues to maintain a cautious stance, the pace of the bull market may slow, but a significant increase in market liquidity could provide bottom support for a subsequent rebound."
Henrik Andersson, Chief Investment Officer of Apollo Capital, told Cointelegraph: "The market had already anticipated that there would be no rate cut this week, so this outcome is not surprising."
However, the market still expects one or two rate cuts before the end of the year.
He also noted that it is worth paying attention to the two dissenting votes, which is the first occurrence in 30 years. Board member Christopher Waller and Vice Chair Michelle Bowman supported a 25 basis point rate cut by the Fed.
The crypto market dipped slightly after the announcement but warmed up again during the Asian trading session on Thursday morning.
The total market capitalization is approximately $3.94 trillion and has been trading within a sideways channel for the past two weeks.
U.S. rate cuts typically boost the crypto market, as lower interest rates reduce the attractiveness of traditional savings accounts, driving investors toward high-risk, high-return assets like cryptocurrencies.
Related: White House Releases Long-Awaited Cryptocurrency Regulatory Recommendations Report
Original: “Bull Market Slowing? Fed Rate Cut Probability Drops to 40%”
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