Key Takeaways
- Bitcoin surged toward $86,000 after the Fed's policy update.
- The Fed held rates at 4.25%-4.5% and reduced QT measures.
- Markets expect two interest rate cuts in 2025, supporting Bitcoin.
Traders closely watched the Federal Open Market Committee (FOMC) minutes and Fed Chair Jerome Powell’s press conference for insights into monetary policy.
Powell confirmed that the Fed would maintain its target interest rate range between 4.25% and 4.5%, where it has remained since December 2024.
Changes in quantitative tightening
The Fed also announced a reduction in its quantitative tightening (QT) policy, lowering the monthly redemption cap on Treasury securities from $25 billion to $5 billion.
Despite downgrading its economic growth outlook, the central bank’s policy stance aligned with market expectations.
Bitcoin’s rally
Following the announcement, Bitcoin extended its rally, reaching an intraday high of $85,950.
The stock market also reacted positively, with the Dow Jones Industrial Average gaining 400 points and the S&P 500 rising by 77 points.
Future outlook for Bitcoin
Bitcoin traders welcomed the Fed’s commitment to two additional rate cuts in 2025, which could further support the asset’s bullish momentum.
