- The US Fed left interest rates unchanged again, citing the “lack of further progress” on the 2% inflation target.
- BTC remains under pressure despite a modest turnaround after the Fed meeting.
Bitcoin [BTC] eased the two-day bleeding streak after the Fed meeting. As expected, the US Federal Reserve left interest rates unchanged on May 1.
This is the sixth Fed meeting at which the agency has kept interest rates at 5.25% – 5.50%. However, the Fed noted that rate cuts are only appropriate if there is greater confidence that inflation will move toward 2%.
Part of the Fed’s policy statement read,
“There has been no further progress towards the Committee’s 2 percent inflation target in recent months.”
At a later press conference, Fed Chairman Jerome Powell was asked whether there would be three rate cuts later this year. To which Powell responded,
“We saw no progress in the first quarter; it appears that it will take longer to reach that level of trust.”
In short: the position of ‘higher rates for longer’ appears to be officially back.
Bitcoin saw a modest reversal as memecoins staged a brief recovery
Within an hour of the Fed’s interest rate decision, memecoins showed a slight recovery. Bonk [BONK], Floki Inu [FLOKI]And dog hat [WIF] recovered by 6%.
BTC and Ethereum [ETH] recorded a modest turnaround in the same period.
Over the past two days, BTC has fallen hard, losing more than 12% from a high of $64.7K to a low of $56.5K. This extended BTC’s losses in April into May and underlined a difficult second quarter.
Following the Fed’s statement, BTC reclaimed $58,000 but fell lower a few minutes later, indicating it was still under immense selling pressure.
ETH also saw modest gains but was facing rejection at the $3000 level at the time of writing.
With the Fed’s “higher for longer” stance and negative flows out of US BTC ETFs, it will be interesting to see if BTC could regain the lows around $60.8K.