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Bitcoin soared above $97,000 after news that the US and China will resume tariff talks.
At this point, the announcement of the meeting between the two countries improved investor confidence in the crypto market and increased major altcoins such as Ethereum (ETH), XRP, Cardano (ADA) and Dogecoin (DOGE), apart from Bitcoin.
With the US-China trade war winding down, attention has turned to today’s FED decision, an important macro event that could determine Bitcoin’s short-term direction.
After January, when the FED kept interest rates constant, dollar, gold, stock market and cryptocurrency investors are wondering when the first interest rate cut of 2025 will be made, while it remains uncertain whether the FED will make a surprise.
When Will the May FED Interest Rate Decision Be Announced?
The FED will announce its May interest rate decision on May 7, 2025 at 21:00 Turkish time.
Following the decision, FED Chairman Jerome Powell will make oral statements at 21:30.
In Which Direction Are Expectations Focused?
While the overwhelming majority of the market, 98%, expects the FED to keep the policy rate constant in the range of 4.25% – 4.50%, only a small segment of 2% expects interest rates to be reduced to the range of 4.00% – 4.25%.
At this point, the market does not expect the FED to cut interest rates due to the negative conditions created by the tariffs.
Experts believe the Fed will prefer to wait and see how the new tariffs will affect the U.S. economy before changing interest rates.
Deutsche Bank analysts think that the Fed will hold off on interest rate cuts for a longer period of time and keep interest rates steady this month to see how the economic picture will shape in the coming months.
Olu Sonola, Head of US Economic Research at Ritch Ratings, said the latest employment report was good in every way. Noting that the labor market indicated resilience rather than recession in the latest report, Sonola argued that the latest economic data was also positive, but that the FED would wait on reducing interest rates.
Powell Statements Are Very Important!
While it is unlikely that the FED will make a surprise rate cut as expected, signals from the policy text and Powell’s statements are expected to have an impact on the direction of the markets.
At this point, Powell’s stance on inflation, growth and interest rate cuts will guide the Bitcoin and crypto markets.
Experts say Powell is cornered and that Powell and the FED have a difficult choice to make.
“Keep interest rates steady and risk further economic slowdown, or cut rates and risk reigniting inflation.”
US President Donald Trump is also pressuring the Fed to lower interest rates.
What Awaits Bitcoin and Crypto Markets?
It is stated that if Powell’s attitude in his speech is moderate, a new upward momentum can be expected in Bitcoin and altcoins, while it is estimated that a hawkish attitude may cause the BTC price to retest the support around $92,000.
*This is not investment advice.
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