Bitcoin (BTC) Holds Near $84K Following Fed Decision

The U.S. Federal Reserve decided to keep its benchmark fed funds rate range unchanged at 4.25%-4.50% during its latest meeting, marking the second consecutive pause after three rate cuts at the end of 2024. The decision was in line with market expectations.

However, the Fed’s quarterly economic projections painted a gloomy picture of the U.S. economy, with a significant downgrade in growth expectations. The GDP growth forecast for 2025 was revised down to 1.7% from 2.1% in the previous projection in December. Projections for 2026 and 2027 were also trimmed.

The central bank cited increased uncertainty around the economic outlook, likely referring to the ongoing trade tensions and tariff threats by President Trump. Inflation projections were also revised upward, with core PCE inflation expected to reach 2.8% this year, compared to the previous forecast of 2.5%.

The “dot plot,” which shows FOMC members’ projections for future interest rates, indicated that the fed funds rate is expected to end the year at 3.9%, unchanged from the December forecast. Projections for 2026 and 2027 remained at 3.4% and 3.1%, respectively.

In a move to support the economy, the Fed announced that it would slow the pace of securities runoff from its balance sheet, starting on April 1. The reduction in runoff will be reduced to $5 billion from the previous $25 billion.

Following the announcement, Bitcoin experienced some volatility before trending lower to $83,500. U.S. stocks, on the other hand, maintained solid gains, while the 10-year Treasury yield dipped slightly to 4.28%.

The recent market volatility can be attributed to concerns over the impact of President Trump’s tariff threats on inflation and economic growth. The Fed’s hawkish stance in recent meetings has also dampened hopes for looser financial conditions, posing challenges for cryptocurrencies and stocks.

Market participants will be closely watching Fed Chair Jerome Powell’s press conference for further insights into the central bank’s monetary policy outlook. Powell is scheduled to speak at 2:30 p.m. Eastern Time.

In conclusion, the Fed’s decision to hold rates steady reflects a cautious approach amid growing economic uncertainties. The central bank’s actions will continue to shape market dynamics in the coming months.