FOMC: still no cuts. Will Bitcoin try to break through $84k?

By Davide Grammatica

All is quiet on the interest rate front, with the Fed not giving in to cuts as expected. Do the Dot Plots open up new perspectives?

The March FOMC

In the wake of a US economy that seems to continue to expand at a sustained pace, the Fed has decided to leave interest rates unchanged. The unemployment rate remains relatively low, and the labor market is stable, as is the level of inflation.

The goal of bringing inflation back to 2% remains far off, and so at the last FOMC meeting it was decided to leave interest rates in the 4.25% – 4.5% range.

In addition to market uncertainty stemming from still-high inflation, in recent months there has been the new trade policy of Trump and the tariffs imposed on foreign countries. However, there is still hope for further cuts during 2025.

Furthermore, the scope of Quantitative Tightening (QT) – the monetary policy tool used by the Fed to reduce liquidity in the economic system – has been reduced, lowering the monthly repayment limit on Treasury bonds from $25 billion to $5 billion.

Just in the last few days, the banking sector had leaked concerns about the suspension of QT, with Fed officials also concerned that this dynamic could cause problems in the markets in a context in which the Treasury Department is already facing several constraints in the management of government finances within the scope of the federal debt limit.

The Bitcoin reaction

In all this, there have been no sudden movements on the crypto front, with Bitcoin still struggling to break through $84k.

After Bitcoin‘s latest plunge, with the break of $90,000 in the last week of February and the plunge to lows in the $76,600 area, the price has been trading sideways for over a week.

In fact, in the last 7 days, BTC has fluctuated between lows in the $80,000 area and highs in the $85,300 area, with a current price of just under $84,000.

The expectations dictated by inflation under control, the market collapse of the last few weeks and the need to refinance a huge amount of US debt, seem to be bringing a first phase of respite to the markets and consequently to Bitcoin.