All eyes are on the US Federal Reserve as it prepares to publish its most recent interest rate decision today, following the end of the FOMC meeting held on May 6 and 7. Fed Chair Jerome Powell is widely expected to keep rates unchanged at 4.25%–4.5%, resisting pressure from US President Donald Trump, who has been vocal about the need for cuts.
April jobs report, which showed a solid increase of 177,000 in April payrolls, is likely to strengthen Powell’s stance. A resilient labour market gives the Fed room to maintain higher rates, even as inflation continues to show signs of softening.
What do interest rates mean for crypto?
Interest rates, set by the Fed through its benchmark federal funds rate, determine the cost of borrowing money. Lower rates make borrowing cheaper, improving liquidity in the market as consumers and businesses take on debt to invest and spend. This often fuels a rise in asset prices—including cryptocurrencies—as investors hunt for higher returns in riskier assets. On the flip side, higher rates tighten credit conditions and pull investors toward safer, interest-bearing instruments like bonds. This can drain momentum from the crypto market. Meanwhile, US stocks fell on Tuesday as the Federal Reserve began its two-day policy meeting. Investors are closely monitoring the potential impact of President Trump’s tariffs on the Fed’s interest rate decisions and overall economic outlook
“I’m ready for some volatility”
As the Fed decision nears, crypto communities online are buzzing. One user on X posted, “Trump’s upcoming news could stir things up, but it’s hard to say if it’ll be good or bad for crypto.” Another wrote, “Sounds like a wild day ahead.” Echoing the sentiment, one user warned, “Powell’s rate decision and Trump’s announcement could shake up the crypto market!” Others noted that Powell’s tone and Trump’s rhetoric could swing market sentiment quickly. “I hope the market doesn’t go bear really,” one user added.