Federal Reserve Holds Rates Steady Amid Trade Tensions, Bitcoin Gains 1.5% Post-Announcement
The post Federal Reserve Holds Rates Steady Amid Trade Tensions, Bitcoin Gains 1.5% Post-Announcement appeared on BitcoinEthereumNews.com.
The Federal Reserve’s recent decision to maintain interest rates highlights the ongoing economic uncertainty amidst trade tensions between the U.S. and China. The central bank’s cautious approach reflects significant pressures from tariffs and their potential impact on the broader economy, emphasizing a carefully monitored data-driven strategy. According to CoinGecko, Bitcoin gained momentum following the Fed’s announcement, rising to approximately $96,000 after the rates decision. The Fed’s steady interest rates amidst trade tensions impact crypto markets; Bitcoin surges as economic uncertainty looms over U.S.-China relations. Federal Reserve Keeps Interest Rates Steady: What It Means for the Economy The Federal Reserve chose to keep interest rates unchanged, maintaining the target range at 4.25% to 4.5%. This decision aligns with their acknowledgment of rising economic uncertainties, particularly in light of tension from ongoing trade tariffs imposed by President Trump. The Fed’s reluctance to adjust rates for the fourth consecutive meeting underscores their commitment to observing data trends before making further changes. Impact of U.S.-China Trade Relations on Monetary Policy As the Federal Reserve navigates the turbulent landscape shaped by trade tariffs, they face a complex dilemma. An increase in inflation, driven by Trump’s tariffs, could necessitate higher interest rates, thereby potentially stalling economic growth. Recent job data from the U.S. Bureau of Labor Statistics shows stability in the labor market, with 177,000 jobs added in April, which could buffer against immediate turmoil. Yet, the Fed’s statement indicated that they will carefully assess incoming data to calibrate their next moves. Inflation Trends and the Fed’s Preferred Measures Inflation rates appear to be stabilizing, moving closer to the Fed’s target of 2%. The core measure of the Personal Consumption Expenditures Price Index (PCE), excluding volatile food and energy prices, has shown a rise of 2.6% year-over-year, down from 3% the previous month. This cooling inflation…
