In its meeting on May 7, 2025, the US Federal Reserve opted to maintain its key interest rate within the range of 4.25% to 4.50%, explaining that it required more insight into the economy before making any policy adjustments.

This decision by the Federal Open Market Committee (FOMC) was in line with what the market had anticipated, indicating a cautious approach while inflation steadies and economic growth slows down.

Following the FOMC's announcement, the cryptocurrency market responded calmly, with Bitcoin hovering around $96,300 and Ethereum at $1,800 at the time of the decision.

Traders are now eager to hear from Fed Chair Jerome Powell during the press conference, looking for any indications of possible future rate cuts.

The Federal Reserve's statement mentioned recent economic softness, such as a 0.3% decline in GDP in the first quarter, but also highlighted a resilient labor market and inflation moving closer to their 2% target.

This nuanced perspective suggests that the Fed is unlikely to tighten monetary policy further unless inflation accelerates again.

The Federal Reserve stated, “The Committee's goal is to achieve maximum employment and a 2% inflation rate over the long term. Economic uncertainties have increased.”

For crypto investors, a stable interest rate ensures continuity in current market conditions. Appetite for risk may persist, particularly if Powell hints at potential rate cuts later in the year. Lower interest rates generally benefit crypto assets by weakening the dollar and enhancing liquidity for other investment options.

The themes of tokenized US Treasuries and stablecoins with yield-bearing features remain significant, as liquidity on blockchain networks continues to move towards platforms offering returns tied to conventional interest rates.

If the Federal Reserve maintains its pause, this trend could continue while keeping institutional investors involved in the cryptocurrency market.

Now, the markets are awaiting upcoming Consumer Price Index (CPI) and employment data to assess the Federal Reserve's future actions. If there are indications of lower inflation or economic vulnerabilities, the case for a rate cut in the latter part of 2025 may strengthen, potentially giving cryptocurrency prices another boost.