On March 19, a significant legal victory for the crypto industry was announced by Ripple’s CEO Brad Garlinghouse. The U.S. Securities and Exchange Commission (SEC) has officially withdrawn its appeal against Ripple, according to a video posted on a social media platform.
Aside from this noteworthy development, another major financial event has swept the crypto market: the conclusion of the Federal Reserve’s recent meeting. The crypto market is closely watching the outcomes of the Federal Reserve’s decisions.
Fed Holds Interest Rates Steady Amidst Increasing Uncertainty
The results of the latest Fed meeting can be broken down into six critical decisions. First, the Federal Reserve decided to maintain the current interest rates, holding the borrowing rate between 4.25% and 4.5% for the second consecutive meeting. This decision marks a sustained pause in the Fed’s tightening cycle.
Secondly, the Fed acknowledged that the economy’s uncertainty has risen. Third, the Fed’s updated forecasts indicate a shift in expectations for rate cuts in 2025. The median prediction suggests 50 basis points of cuts for the year, but an increasing number of Fed officials are skeptical about the necessity of rate reductions. In December, only one official did not anticipate any rate cuts in 2025. However, opinions are now more divided, with that number rising to four, as highlighted by The Kobeissi Letter analysts on a social media platform.
In addition to interest rates, the Fed adjusted its economic growth projections for 2025 downward, indicating that policymakers anticipate a slower expansion. This revision is accompanied by an increase in the Fed’s inflation forecast for the same period, reflecting fears of persistent price pressures. As inflation continues to be a primary concern, the central bank is cautiously assessing the appropriate time to shift towards a more relaxed monetary stance.
Fourthly, the Fed announced plans to decelerate the pace of its balance sheet runoff starting in April. This is coupled with a significant reduction in the Fed’s 2025 growth forecasts and an upward adjustment in their 2025 inflation predictions.
Implications For Digital Assets And The Crypto Market
The Fed’s decision to maintain rates and its mixed signals about future cuts present a dynamic scenario for Bitcoin and other cryptocurrencies. The continued concerns of the Fed about inflation and economic uncertainty suggest that the transition to more accommodating crypto industry policies may not be straightforward.
However, if the Fed remains reluctant to cut rates and economic growth decelerates as predicted, digital assets may face challenges later in the year, potentially slowing down the growth predicted by crypto analysts.
