The Fed’s Doveish Stance Boosts Risk Assets, Bitcoin Reaches $68,000 Level Again

The Fed's Doveish Stance Boosts Risk Assets, Bitcoin Reaches $68,000 Level Again

The Fed's Doveish Stance Boosts Risk Assets, Bitcoin Reaches $68,000 Level Again

The Federal Reserve announced last night that the benchmark interest rate would remain unchanged at 5.25% – 5.5%, maintaining rate stability for the fifth consecutive month. In addition, the Federal Reserve officials’ dot plot indicates that there will be three rate cuts this year, but the specific timing cannot be disclosed. According to the indicator from FedWatch, the market currently expects the first rate cut to occur during the Federal Reserve’s policy meeting on June 11th to 12th, with a probability close to 75%.

Earlier CPI and PPI reports in January and February had led to concerns in the market about the possibility of the Federal Reserve postponing rate cuts. However, during last night’s press conference, Federal Reserve Chairman Powell stated that these reports did not change his view on inflation, and he believed that inflation was gradually declining. Furthermore, Powell stated, “We believe that the policy rate may be at a peak in this cycle, and if the economy develops as expected, it would be feasible to start easing policy at some point this year. However, if appropriate, we intend to keep the current target range for the federal funds rate for a longer period.”

After the meeting, risk assets including US stocks and cryptocurrencies started to rebound. Bitcoin surged back to the $68,000 level, while Ether recovered from yesterday’s decline and returned to $3,500.