Steady rates, shaky markets: Powell’s Fed decision & the crypto reaction

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Relief rally: Powell holds as Trump tariffs loom

March 20– Jerome Powell, the Fed chair of the United States of America shook the markets–again. 

But this time what happened was a bit unexpected. 

Read also: Federal Reserve might cut rates because of Trump’s tariffs

Usually Jerome Powell is the one to set clear narratives for the economic outlook. Since the pandemic, Jerome has become a key influential figure in the markets and especially the crypto market.

Federal Reserve meetings have played out like a key chapter in the story of the crypto markets— setting the tone, sparking rallies, or triggering pullbacks.

When the Fed held rates steady at 5.25%–5.50% in March 2024, Bitcoin surged to a then-record high above $72,000. However, the momentum was short-lived, with a sharp correction in April as traders rushed to lock in profits.

Fast forward to September, the markets saw the first rate cut in months: 25 basis points, down to 5.00%–5.25%. That small shift sparked a 10% rally in Bitcoin over the next ten days, kickstarting a strong Q4 run that carried into early 2025.

Then came the November FOMC meeting, right in step with Trump’s election win. Another 25 bps cut followed, bringing the range to 4.75%–5.00%. This triggered bullish sentiment all across the market, Bitcoin touched $99k for the first time following the news.

What happened this time?

The Fed maintained the rates.

The Federal Reserve held its benchmark interest rate unchanged at 4.25%–4.5% for the second meeting in a row, continuing the pause that started in January.

Despite rising inflation and signs of slower economic growth, Fed officials held on to their outlook for two rate cuts later this year. They now expect inflation to hit 2.7% in 2025 slightly higher than their earlier 2.5% projection while acknowledging that economic uncertainty has grown.

Fed Chair Jerome Powell downplayed recession concerns, attributing the recent inflation spike to temporary factors like the Trump administration’s tariffs.

Despite the uncertainty, officials still expect rate cuts in the months ahead. Most Fed policymakers see rates easing to around 3.75%–4.00% by the end of 2025—right in line with what they had projected earlier.

Read also: President Trump says the Federal Reserve should cut rates soon 

How did the markets react?

This announcement had a positive impact on the crypto market, with Bitcoin, Ethereum and Ripple seeing a positive price rally.

Ripple’s price rally was the greatest, not only because of the rate cut but also because of the announcement by Brad Garlinghouse, co-founder of Ripple,that the US Securities and Exchange Commission (SEC) has finally withdrawn its lawsuit. After the process dragged on for four years, the case was finally closed, leaving Ripple and XRP free to trade and innovate.

Open interest for XRP quickly jumped from $1.4 billion to $1.7 billion, signaling increased trader appetite for a new price range. The sharp price movement triggered $10.54 million in daily total liquidations, with $9.64 million in short positions wiped out on Bybit alone.

But one coin that stood out and no one expected, amongst the biggest winners from Fed Day is the broccoli memecoin, named after co-founder Changpeng Zhao’s dog broccoli. It went up by 80% intraday.

What’s next?

While the FOMC meeting was just one of several factors driving recent price movements, it highlights how pivotal macroeconomic events can shape the crypto markets. 

Staying informed about such developments is essential in navigating this fast-moving market.

At Cryptopolitan, we’re committed to bringing you the freshest insights and expert analysis, so you’re always equipped to make smarter, more informed decisions.

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