At least during the next month, the interest rate will remain 4.5% per year. A moderate volatility of BTC is expected, since the decision was planned by the market. Today, March 19, 2025, the United States Federal Reserve (Fed) held its monthly meeting to define interest rates, a decision that financial markets followed with great expectation. After the meeting, the Fed announced that the interest rate will be maintained at 4.5% per year, at least during the next month, a result that was in line with the analysts' forecasts. Bitcoin (BTC) has historically demonstrated high volatility to ads related to interest rates. When the Fed reduces the rates, the price of BTC tends to benefit, since investors look for alternatives of greater risk than the treasure bonds in the face of a cheap money environment. On the contrary, high or unchanged rates usually generate uncertainty or even bearish pressure, since traditional assets, such as bonds, become more attractive. In this case, the decision to maintain 4.5% does not represent a surprise for the market, which could moderate extreme fluctuations in the short term. Even so, the traders remain attentive, since any future signal of the FED (such as the ads that its president, Jerome Powell) will give abandoning sudden movements.
Bitcoin (BTC) reacts with high volatility in the moments before and after the Fed decision (yellow vertical line). Source: TrainingView.
Today's announcement was widely expected. The economists and observers of the market had anticipated that the Fed would opt for stability, given the recent comments of Jerome Powell. According to cryptootic reports, Powell has commented that the Federal Reserve is not in a hurry to cut interest rates, despite the public pressures of President Donald Trump, who has advocated a more lax monetary policy to stimulate the economy. Powell, however, has underlined the importance of maintaining a prudent approach, prioritizing inflation control and financial stability over political demands.