FOMC meeting on May 7: Implications for Bitcoin and cryptocurrency

The upcoming meeting of the FOMC (Federal Open Market Committee) of the Federal Reserve on May 7, 2025, is drawing attention from cryptocurrency investors. While most experts believe that the Fed will keep interest rates unchanged, what Chairman Jerome Powell says could have a significant impact on both the stock market and cryptocurrencies. The Fed raised interest rates sharply in 2022 and 2023 to combat excessive inflation. However, since the end of 2024, the Fed has gradually reduced interest rates and the current rate is 4.25%-4.50%. Most individuals ( about 94% ) believe that the Fed will not cut interest rates right now. However, investors are hoping for any signs of interest rate cuts in the future. If Powell appears cautious and worried about inflation ( that experts refer to as "hawkish" ), this could push Bitcoin prices down to around $91,500 to $92,000, according to market analyst King Baldwin. But if Powell hints that there will soon be more rate cuts, Bitcoin could rise back to $100,000. Although the job market is strong, inflation is still somewhat high. The Fed's preferred measure, core PCE inflation, is at 2.6% and there is a 60% chance of a recession, which is causing concern among investors. Cryptocurrency expert Michaël van de Poppe believes that this time there will be no interest rate cut. He stated that the Fed will be cautious as inflation has not decreased enough. An unexpected rate cut would shock the market. There is also political pressure from Donald Trump, who wants the Fed to cut interest rates, especially as tariffs increase. However, the Fed is expected to focus on inflation rather than politics. As the traditional economy weakens, many are buying Bitcoin as a safe haven asset. Experts have warned traders to avoid taking large risks and prepare for market volatility following Powell's speech. In March, during the FOMC meeting, the Fed surprised the market by keeping interest rates unchanged instead of cutting them, causing cryptocurrency prices to surge. At that time, the price of Bitcoin skyrocketed to over $87,000.