Bitcoin (BTC) reclaimed the $85,000 threshold after forecasting the median base cut of 50 interest rates in 2025.
In addition to signaling potential interest rate reductions, the Federal Reserve announced plans to slow the pace of balance sheet outflows, also known as quantitative tightening (QT), starting April 1.
The monthly limit for the Treasury, which matures without exchange, will decrease from the past $25 billion limit to $5 billion. The announcement has resulted in a surge in the overall global market, including crypto.
Bitcoin jumped from $84,235.71 to nearly $86,000 before settling at $85,363 at press time, based on encrypted data.
Not all major altcoins have not responded strongly, despite the price rise of Bitcoin nearly 2%. The price of Ethereum (ETH) is on sale for $2,039.11 after a positive fluctuation of 0.6% over the same period, with Cardano (ADA) securing a mere 0.5% growth.
Meanwhile, XRP and BNB showed no practical price fluctuations. However, Solana (Sol) was above the $130 threshold and was trading at $133.55 at press time.
Federal Reserve Chairman Jerome Powell emphasized that the decision should not be interpreted as a broader policy change, but as a technical adjustment to ensure smooth market functioning.
Fed rate pass
The updated forecast reveals a more cautious attitude among FOMC members regarding the pace and scope of interest rate reductions. The median forecast will bring interest rates to approximately 3.9% by the end of the year.
Nine policymakers expect two cuts in 2025, down from 10 in December, while eight people expect only one or one cut, up from four in previous forecasts.
Meanwhile, two members have cut three times, down from five in December, with no forecast of rate reductions of more than three times.
Long-term expectations remain largely unchanged. The median federal funding rate forecast for the end of 2026 was 3.4%, while the 2027 forecast was 3.1%. The long-term estimate of the Fed for neutral interest rates remains stable at 3%.
Furthermore, the Fed’s latest economic forecasts show slow economic growth. Median 2025 GDP projection has been revised downward from 2.1% in December to 1.7%.
The 2025 unemployment forecast rose from 4.3% to just 4.4%, indicating a modest labor market softening expectation.
The central bank has also adjusted its inflation forecast upwards, predicting that inflation rates for personal consumption expenditure (PCE) will reach 2.7% in 2025. Core PCE inflation, which excludes food and energy, is projected to rise to 2.8% compared to previous forecasts of 2.5%.
The impact of customs duties
At a post-meeting press conference, Powell addressed concerns about inflationary pressures, particularly the impact of tariffs.
He said a significant portion of the recent inflationary rise could be attributed to tariff-related factors, but their long-term impact remains uncertain.
Powell also described tariff-driven inflation as “temporary,” but acknowledged the difficulty of assessing its effectiveness. He reiterated that the Fed is monitoring economic data for signs of weakness, but emphasized that policymakers are not rushing to cut fees.
Due to sustained inflationary pressures and slowing economic growth, the Fed’s latest forecasts show a more measured approach to monetary policy adjustment.
The central bank’s willingness to slow quantitative tightening while maintaining a cautious attitude towards interest rate reductions reflects the act of balancing economic stability and inflation control.
When reporting 9pm UTC on March 19, 125Bitcoin ranks number one in terms of market capitalization, and prices are rising 4.21% Over the past 24 hours. Bitcoin’s market capitalization is $1.7 trillion, with 24-hour trading volume of $328.2 billion. Learn more about Bitcoin›
When reporting 9pm UTC on March 19, 125the Crypto market totals $2.8 trillion, with a 24-hour volume of $979.8 billion. Bitcoin’s advantage is currently 60.67%. Crypto Market Details›
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