Bitcoin has skyrocketed above $97,000 after news that the US and China will resume tariff talks.
At this point, the announcement of a conference between the two countries improved investors’ trust in the crypto market, with the exception of Bitcoin increasing the number of major altcoins such as Ethereum (ETH), XRP, Cardano (ADA) and Dogecoin (DOGE).
The collapse of the US-China trade war has led to attention being focused on today’s Fed’s decision, an important macro event that can determine the short-term direction of Bitcoin.
Since January, the Fed has kept interest rates constant, and investors in gold, gold, stock markets and cryptocurrency have wondered when the first rate cuts in 2025 will be made, but it is unclear whether the Fed will bring surprises.
When will the FED FOD interest rate decision be announced?
The Fed will announce its May interest rate decision at 9:00 PM in Türkiye on May 7, 2025.
Following the decision, Federal Reserve Chairman Jerome Powell will issue an oral statement at 21:30.
Which direction is your expectations focused?
The overwhelming majority of the market, 98%, expects the Fed to keep its policy rate constant in the 4.25%-4.50% range, but only the small segment of 2% expects interest rates to be reduced to the 4.00%-4.25% range.
At this point, the market does not expect the Fed to cut interest rates due to negative conditions arising from tariffs.
Experts believe the Fed prefers to wait and see how new tariffs will affect the US economy before changing interest rates.
Analysts at Deutsche Bank believe that if the Fed continues to stabilize interest rates this month to see how the economic situation this month will be formed in the coming months, the Fed will refrain from cutting interest rates.
Olu Sonola, head of US economic research at Ritch Ratings, said the latest employment report was good in all respects. Noting that the labour market shows resilience rather than recession in its latest report, Sonora argued that the Fed will wait for interest rates to be cut, although the latest economic data is positive.
Powell’s statement is extremely important!
While the Fed will unlikely to cut surprise rates as expected, signals from policy text and Powell’s statement are expected to affect the market direction.
At this point, Powell’s stance on inflation, growth and interest rate reductions will guide the Bitcoin and crypto markets.
Experts say Powell is cornered and Powell and the Fed have difficult choices.
“The risk of stabilizing interest rates, risking further economic slowdowns, or reducing interest rates and rekindling inflation.”
US President Donald Trump has also pressured the Fed to lower interest rates.
What awaits Bitcoin and the crypto market?
If Powell’s attitude in his speech is moderate, new upward momentum is expected for Bitcoin and Altcoin, but it is estimated that Hawkish’s attitude could retest support with a BTC price of around $92,000.
*This is not investment advice.