As expected almost universally, the United States Federal Reserve left stable reference interest rates at 4.25% -4.50% on Wednesday at the June meeting.
“Although changes in net exports have affected the data, recent indicators suggest that economic activity has continued to expand at a solid pace,” said the press release. “The unemployment rate is still low, and the conditions of the labor market remain solid. Inflation remains somewhat high.”
The quarterly economic projections of the FED, which include the “points plot” that indicates where the Central Bank awaits the Fed fund rate over time, showed that the political leaders see rates of 3.9% for the end of the year 2025, translating to 50 basic points cuts this year, the same as they expected in March. However, Fed members see rates decrease to 3.6% next year and 3.4% in 2027, indicating fewer rates cuts than their previous projection.
Policy formulators also reduced their economic growth projections, with the increase in GDP this year seen by 1.4% versus 1.7% in the March forecast. They also projected greater inflation for this year, with personal consumption expenses (PCE) and the central PCE inflation that land at 3% and 3.1%, versus 2.7% and 2.8% in March. Fed members also see the unemployment rate that increases to 4.5% this year and for 2026, compared to 4.4% and 4.3% of March projections.
Bitcoin (BTC), around $ 104,000 before during the session, changed little to $ 104,200 minutes after the Fed decision. The S&P 500 and Nasdaq rates increased.
“The DOT plot of the Fed reveals a clear trend towards the ESTEFFORAS PRESSURE, a scenario in which economic growth slows down, while inflation and unemployment remain uncomfortably high,” said David Hernández, a specialist in cryptographic investment of the 21SHAR DIGITAL ASSETS ADMINISTRATOR.
This combination historically eroded the value of traditional investments and fiduciary currencies, but could be beneficial for Bitcoin due to its shortage, nature without borders and lack of dependence on the economic production of the United States.
“The new capital will inevitably seek assets that offer a reserve of value and growth potential, a search that leads many directly to BTC,” said Hernández.
Read more: the fed stagclation risk signal could be optimistic for Bitcoin, says the analyst
Update (June 18, 19:31 UTC): Add the analyst comment.
