Bitcoin The dollar surged above $94,000 before quickly retreating as Federal Reserve Chairman Jerome Powell sounded both dovish and hawkish following the Fed’s quarter-point interest rate cut on Wednesday.
Bitcoin prices languished around $92,000 for most of the session, eventually rising to $94,400, after Powell highlighted the risk that the labor market could be weaker than expected at his post-meeting press conference and gave back most of his gains after saying the fight against excessive inflation was far from over.
Recently, BTC changed hands at $93,500, up 0.5% in the past 24 hours. ether Continuing its recent relative strength, it is trading above $3,400, up about 2.4% over the same period.
Powell said at a post-meeting news conference that Fed policy is now “within a reasonable range of neutral estimates, which puts us in a good position to determine the extent and timing of further adjustments.”
“We are ready to wait and see [about further rate cuts],” he added.
Powell acknowledged there will be “a lot of data” ahead of the Fed’s next meeting in January that will influence the central bank’s next steps.
In addition to the Fed’s earlier decision to cut the federal funds rate range by 25 basis points, the New York Fed also announced that it will begin purchasing short-term Treasury bills and, if needed, Treasury bills with remaining maturities of up to three years, with the goal of purchasing approximately $40 billion next month starting on Friday – a move aimed at easing financial conditions, but does not mean the start of a full quantitative easing cycle.
Powell said purchases will remain “high” for several months.
That marks a change from the central bank’s approach of shrinking its balance sheet over the past three years after a rapid expansion during the pandemic.
analysts think
Daniela Hathorn, senior market analyst at brokerage Capital.com, said in a report, “The Fed made it clear that this rate cut does not mark the beginning of an aggressive easing cycle and emphasized that future steps will largely depend on incoming inflation and labor market data.”
She added: “While policymakers agreed on the need for modest easing of monetary policy amid mixed data and signs of slowing momentum following the shutdown, the latest communications emphasized caution.”
“The fact that two FOMC members voted not to change interest rates suggests that this was a close call and was complicated by a lack of complete data,” said Brian Coulton, chief economist at Fitch Ratings. “A relatively modest pickup in core inflation in recent months may have convinced the committee that another rate cut is justified while keeping rates just above neutral.”
“It seems unlikely that interest rates will continue to fall over the next consecutive meetings. We now expect only two more rate cuts by June 2026, taking the federal funds rate to the 3.25% (cap),” he said.
David Hernandez, a cryptocurrency investment expert at 21Shares, said: “Between signaling a pause on rate cuts and restarting the Fed’s Treasury purchases, Powell is pushing for both of their mandates.”
Hernandez said that for Bitcoin to break out of its trading range, it would need new momentum to “overcome concentrated short pressure” near the $94,500 resistance zone, where Wednesday’s breakout capped the price.
“If capital costs now fall and spot ETF inflows strengthen as expected, this could be the spark that turns caution into momentum and pushes Bitcoin back towards the psychological $100,000 mark,” he said.