Federal Reserve Keeps Rates at 4.25%-4.5%, September Cut Odds Drop – Crypto Bull Run Over?

The Federal Reserve maintained interest rates at 4.25%-4.5% on July 30, marking the fifth consecutive meeting without change, while two governors dissented in favor of cuts for the first time since 1993.

The decision triggered a market selloff with the Dow falling over 300 points and cryptocurrency markets experiencing widespread declines before recovering key support levels.

MAJOR BREAKING: Jerome Powell just announced that the Fed Reserve will maintain its benchmark interest rate at 4.25% to 4.5%, as it has done since Dec, citing economic uncertainty because of Trump's tariffs.

This is a major defeat for Donald Trump. Damn. pic.twitter.com/4LBFtGd4sR

Chairman Jerome Powell’s press conference eliminated expectations for September rate cuts, causing market odds for zero 2025 rate cuts to surge from negligible to 25%.

The probability of two cuts dropped from 40% to 33%, while single-cut odds rose from 24% to 27% according to Kalshi data.

Bitcoin briefly dipped below $116,000 during the announcement before rebounding above $118,000, while Ethereum and other major cryptocurrencies saw losses exceeding 2%.

The volatility coincided with $4.1 billion in Bitcoin and Ethereum derivatives expiring, amplifying the price swings.

Notably, Governors Michelle Bowman and Christopher Waller voted against the decision, preferring a 25 basis point cut.

Their dissent marked the first time two Fed members opposed the majority since 1993.

This resulted from the growing internal pressure for policy accommodation despite Powell’s hawkish stance.

Bloomberg Intelligence analyst Mike McGlone recently warned that Bitcoin may be approaching a “sell when they’re yelling” extreme, comparing current market euphoria to historical bubble peaks.

McGlone, who accurately predicted Bitcoin’s $100,000 milestone years earlier, argued that gold’s outperformance since 2024 signals potential weakness ahead for speculative digital assets.

The timing coincided with President Trump announcing additional tariffs during the Fed meeting, including 40% duties on Brazil and 50% tariffs on copper imports.

ALL during the Fed interest rate decision just now:

1. Trump implements additional 40% tariff on Brazil

2. Trump imposes universal 50% tariffs on imports of semi-finished copper products

3. Trump imposes universal 50% tariffs on imports of copper-intensive derivative products…

Trump’s simultaneous policy announcements, while calling for 300 basis points of rate cuts, created additional market uncertainty.

Powell’s press conference drew sharp criticism from market participants and political observers who accused the Fed chair of maintaining a politically motivated monetary policy.

James Fishback, CEO of Azoria Capital, called the session “the most confusing, bizarre, and blatantly political Fed press conference” he had witnessed since 2011.

I’ve watched every Fed press conference since they began in 2011. I spent a decade trading interest rate derivatives. Following the Fed was literally my full-time job. Yesterday was the most confusing, bizarre, and blatantly political Fed press conference I’ve ever seen.

Jerome…

Fishback argued that Powell was “moving the goalposts from meeting to meeting” despite lower-than-expected inflation data.

The criticism intensified as housing affordability reached crisis levels, with mortgage rates remaining elevated due to the Fed’s restrictive policy stance.

Senator Rand Paul criticized both Trump’s tariff policies and the Fed’s monetary approach, stating that “markets, not central planners, should set interest rates.”

Paul pushed for legislation to audit and constrain Federal Reserve authority over rate-setting decisions.

I supported the tax cuts & making them permanent. But let’s be clear: tariffs are taxes too.

I want a smaller government, not one propped up by tariffs or a bloated Fed.

Markets, not central planners, should set interest rates.

That’s why I’m pushing legislation to rein in… pic.twitter.com/7b0Y4YyT1u

The Fed’s statement cited “somewhat elevated” inflation and “solid” labor market conditions as justification for maintaining current policy.

Powell emphasized that tariffs were “pushing up prices” in some goods categories while noting that “changes to government policy continue to evolve.”

Powell refused to commit to September action when directly questioned about potential rate cuts, stating only that “we have made no decisions about September.”

The comments immediately repriced market expectations and contributed to the broader risk-asset selloff.

Despite the initial selloff, cryptocurrency markets quickly recovered with Bitcoin defending the critical $118,000 level and the global crypto market cap stabilizing above $3.8 trillion.

The Fear and Greed Index registered 62, indicating continued bullish sentiment despite increased caution.

Speaking with Cryptonews, Ray Youssef, CEO of NoOnes, noted that while the Fed’s hawkish remarks caused “macro tremors,” the broader bullish market structure remained intact.

“We’re currently witnessing a recalibration phase that reveals why non-sovereign money is gaining strategic relevance as a hedge against macro uncertainty and not the end of the bull cycle.”

He emphasized that Bitcoin’s supply dynamics and institutional demand continue providing strong price support.

Similarly, Shawn Young, Chief Analyst at MEXC Research, shared with Cryptonews that crypto traders experienced significant liquidation events as leveraged positions unwound following Powell’s comments.

However, he observed that the aggressive buying at key support levels enabled swift recovery across major digital assets.

“The Fed’s decision to keep rates steady at 4.25% – 4.5% was broadly expected by most market participants,” Young said.

He added that, “markets had partially priced in the probability of the macro easing era starting towards September, giving political pressure from the white house and recent soft PCE data prints, but FED Chair Powell’s continued hawkish policy tone reduced the probability of that happening now.”

The crypto market’s resilience occurred amid ongoing institutional adoption, with recent ETF inflows maintaining momentum despite temporary slowdowns. Bitcoin ETFs now hold $153.19 billion in assets, while Ethereum ETFs manage $21.5 billion.

McGlone’s warnings about speculative excess centered on gold’s superior performance since Bitcoin reached six-figure territory.

He suggested that past patterns indicate the precious metal may continue outperforming “highly volatile and speculative cryptocurrency” in 2025, particularly if equity markets decline.

Market participants now await crucial earnings reports from major technology companies representing 40% of the S&P 500 market capitalization.

Disappointing results could pressure both traditional and digital assets, testing the crypto bull market’s durability against broader economic headwinds.

For now, Young believed that “the crypto bull cycle remains intact as long as BTC holds above $110,000, but its trajectory may become flatter and more rotational with altcoins and utility-driven tokens likely gaining more attention as investors seek to catch a bigger upside before the end of the current cycle.”

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