Market Shows Signs of Recovery as Fed Confirms 2025 Rate Cuts
The Federal Reserve has signaled that rate cuts are likely later this year, fueling optimism in the markets and even nudging the crypto space into recovery. On Thursday, the crypto market cap rose 1.4%, with Bitcoin near...
The Federal Reserve has signaled that rate cuts are likely later this year, fueling optimism in the markets and even nudging the crypto space into recovery.
On Thursday, the crypto market cap rose 1.4%, with Bitcoin nearing $86,000 as investors digested news that the central bank is holding rates steady for now, while hinting at two quarter-point cuts down the road.
The Fed on Wednesday maintained its benchmark overnight interest rate in the 4.25%-4.50% range. In its statement, officials forecast slower economic growth and higher inflation. At the same time, they confirmed plans to reduce the pace at which they shrink their massive balance sheet, a necessary step amid ongoing Congressional debates over the US borrowing limit.
Meanwhile, investors cheered the prospect of additional rate cuts. The Dow Jones Industrial Average surged by more than 400 points following the announcement. Despite this upbeat sentiment, Fed Chair Jerome Powell cautioned that interest rates would remain elevated if economic conditions required a tighter policy stance.
Trump Insists on Immediate Rate Cuts from the FedAdditionally, President Donald Trump has publicly urged the Fed to lower rates sooner, arguing that easing tariffs could help stimulate the economy.
“The Fed would be MUCH better off CUTTING RATES as US Tariffs start to transition (ease!) their way into the economy,” Trump wrote on Truth Social. “Do the right thing. April 2nd is Liberation Day in America!!!”
( @realDonaldTrump – Truth Social Post )
( Donald J. Trump – Mar 19, 2025, 10:10 PM ET )
The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2nd is Liberation Day in America!!! pic.twitter.com/lOfazjA0Xc
His comments come as the market continues to grapple with uncertainty from recent tariff policies and ambitious fiscal measures involving tax breaks and deregulation.
In this evolving environment, experts see signs that the Fed will be compelled to lower rates gradually.
Rapid Market Downturn Fuels Forecast for Fed Rate CutsSergei Gorev, head of risk at crypto platform YouHodler, noted that the persistent uncertainty surrounding tariffs makes it challenging to pin down the exact timing for cuts. He pointed to the rapid downturn in the S&P 500 and the recent market correction as clear indicators that further easing may be necessary by 2025.
“The market is waiting for more precise signals for a rate cut, which is still hampered by the somewhat opaque situation with duties and how this may subsequently affect the markets,” he said. “In the current situation, the market expects inflation to rise in the next 12 months against the backdrop of Trump’s current trade policy.”
“There are more and more signs in the markets that the Fed will gradually have to lower the interest rate in the medium term,” Gorev added.
“The March correction of the S&P 500 index was the seventh fastest decline since 1929, during the Great Depression. The S&P 500 has fallen 10% since February, fully entering a technical correction. ETH has reached a five-year low against BTC. Thus, the situation on the stock markets is already hinting to the Fed leadership that it would be time to start lowering the rate at least in 2025, as it is becoming more and more difficult to grow further.”
This blend of cautious monetary policy, the potential for future rate cuts and the government’s evolving trade stance has contributed to a more favorable outlook for both traditional and digital asset markets.
The post Market Shows Signs of Recovery as Fed Confirms 2025 Rate Cuts appeared first on Cryptonews.
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