Bitcoin (BTC), the leading cryptocurrency, is hovering above the $104,000 level after the U.S. Federal Reserve decided to keep the benchmark interest rate unchanged for the fourth time in a row.
The Fed’s median forecast shows two interest rate cuts totalling 50 basis points this year. Meanwhile, futures traders are pricing in a 71% chance of a rate cut in September.
The Fed has lowered its 2025 GDP estimate, predicting that the U.S. economy would grow by only 1.4% in 2025.
The most influential central bank also projects U.S. inflation to be around 3% this year, which is well above the Fed’s 2% target.
Analyst Joseph Brusuelas, who is considered to be one of the most prominent rate forecasters, believes that the Fed’s recent communication is indicative of stagflation. “The Federal Reserve’s June policy decision and summary of economic projections strongly imply the Fed expects economic growth to stagnate while inflation and unemployment head higher during the remainder of 2025,” he said.