Bitcoin rebounds to $68k after Fed decides to maintain rates as expected Bitcoin rebounds to $68k after Fed decides to maintain rates as expected
The central bank also reaffirmed its intention to cut rates during 2024, driving the odds of a June cut to 70%.
2 min read
Updated: Mar. 20, 2024 at 10:17 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The US Federal Reserve announced on March 20 that it would keep interest rates steady at 5.25% to 5.5% — aligning with market expectations and easing concerns of a more aggressive tightening of monetary policy.
Additionally, the Federal Open Market Committee (FOMC) maintained its projection for a rate cut within this year, signaling a cautious but optimistic outlook for the economy.
Fed chair Jerome Powell’s expected speech caused the crypto market to bounce back to near-yearly highs after days of heavy bleeding ahead of the FOMC meeting. The
Bitcoin (BTC) was trading at $68,032 as of press time — up 6.52% — after falling to a low of $60,800 earlier in the day, according to CryptoSlate data.
The wider market similarly rebounded from local lows, with most tokens posting gains between 5% and 15%. Meanwhile, some tokens — including the memecoin Pepe (PEPE) and Bitcoin Layer-2 Stacks (STX) — recorded gains of over 20% as the day’s biggest winners.
The bullish momentum could take the market back to the previous week’s highs much sooner than anticipated, despite prevalent bearish sentiment in the preceding days.
Rate cuts by June
The Fed’s decision arrives in the wake of unexpectedly high Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which ignited concerns that inflation could gain momentum.
Such a scenario would have compelled the central bank to maintain stringent financial conditions, potentially delaying interest rate cuts and adversely affecting asset prices.
During the FOMC’s March meeting, policymakers forecasted a reduction in interest rates to 4.6% by the end of 2024, echoing the same median level projected in the December outlook. The affirmation has quelled fears among investors who were apprehensive about a potential hawkish pivot in the Fed’s strategy amid fluctuating economic indicators.
Prior to the FOMC’s latest announcement, market participants were largely anticipating the first rate cut to occur in June, with the odds at roughly 60%. However, the chances have increased post-announcement, with the market now assigning a 70% probability for at least one rate cut by June, based on the CME FedWatch Tool data.
Revised forecasts
Accompanying this rate decision, Fed policymakers have also revised their economic forecasts, notably uplifting the US growth outlook for this year to 2.1 percent from a previous forecast of 1.4 percent made in December. This upgrade highlights a more optimistic view of the economy’s resilience and potential for expansion.
However, the inflation outlook remains a complex challenge, with the headline inflation forecast holding steady, while the projection for annual “core” inflation, which excludes volatile items like energy and food prices, has been slightly elevated to 2.6 percent.
This decision comes after the Fed’s aggressive policy actions since March 2022, where a total of 5.25 percentage points increased the policy rate in response to rising price pressures. Since July 2023, the central bank has paused these increases, adopting a watchful stance as it navigates through economic uncertainties.
Bitcoin Market Data
At the time of press 10:17 pm UTC on Mar. 20, 2024, Bitcoin is ranked #1 by market cap and the price is up 7.06% over the past 24 hours. Bitcoin has a market capitalization of $1.34 trillion with a 24-hour trading volume of $68.48 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 10:17 pm UTC on Mar. 20, 2024, the total crypto market is valued at at $2.56 trillion with a 24-hour volume of $171.73 billion. Bitcoin dominance is currently at 52.28%. Learn more about the crypto market ›
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Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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Jerome Powell first took office as Chair of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term.