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Despite the prevailing optimism, worries persist about the possibility of another significant downturn as the halving approaches in just a few days.

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Following an intense two-day meeting, the FOMC revealed its decision to keep rates unchanged, holding them steady at 5.5%, which marks a 23-year high.

After the FOMC’s announcement, the cryptocurrency market collectively exhaled with relief, shedding the gloom of a challenging week by surging 8.18%. Although this percentage increase may not appear substantial at first glance, it resulted in a market cap growth of over $300 billion, pushing the total to exceed $2.5 trillion at the time of writing.

After declining more than 8% in the previous week, Bitcoin promptly recovered, surging from $60,000 to $68,000 shortly after the conclusion of the FOMC’s meeting. Ethereum, Solana, and Dogecoin also participated in the rally, each recording gains of at least 11%.

Read Also: Which Country Made The Most Profit From Crypto Trading In 2023?

Conversely, Ripple, Cardano, and BNB experienced more modest increases of 7%.

Notably, the exuberance extended beyond cryptocurrencies alone; traditional stock markets, including the DOW, also surged to new record highs following the FOMC’s meeting.

The FOMC Decision Came As Expected

The decision by the FOMC to maintain interest rates at their 23-year high was largely anticipated, especially given the Producer Price Index (PPI) and Consumer Price Index (CPI) figures observed in January and February.

However, Federal Reserve Chair Jerome Powell remains cautiously optimistic about the outlook for the year ahead, expressing hope for improvement by the end of the year.

During his address, Powell outlined that Fed officials are considering a reduction of around 75 basis points (bps) by the year’s end, marking the first rate cut since the onset of the COVID-19 pandemic in March 2020.

While reiterating the Fed’s commitment to bringing inflation below 2%, Powell projected achieving this target by the conclusion of 2026. Although he refrained from specifying the timing, Powell underscored the significance of data in guiding decisions, suggesting a more positive outlook for the latter half of the year.

“We believe our policy rate has likely peaked for this cycle, and if the economy progresses as anticipated, we may begin easing policy restraint later this year,” Powell stated during his post-meeting press briefing. “However, we’re prepared to maintain the current federal funds rate range for an extended period if necessary.”

The Fed chair also emphasized that the FOMC aims to exercise caution in timing rate cuts and will endeavor to identify the most suitable moment for such decisions.

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