The US Federal Reserve leaves its key interest rate unchanged. The Bitcoin price increases, rising above a key level.
March 20, 2025 – US Federal Reserve Keeps Key Interest Rate Constant
The US Federal Reserve (Fed) is maintaining its interest rate pause: The key interest rate will remain unchanged within the range of 4.25 to 4.5 percent, as the Fed announced on Wednesday. This decision had already been expected by the financial markets.
“Uncertainty about the economic outlook has increased,” the central bankers explained. Nevertheless, they are continuing to pursue their plan to cut interest rates twice this year, each by 25 basis points. This is evident from the Fed’s economic forecasts published on Wednesday. They are known as the “dot plot.” For investors, they are considered an important guide to the central bank’s future interest rate policy – even though the forecasts are non-binding and can be adjusted at any time.
At the same time, the Fed lowered its growth expectations for the US economy. Gross domestic product is now forecast to grow by 1.7 percent this year, up from the previous estimate of 2.1 percent. The economic outlook for 2026 has also been revised slightly downward.
The central bank also raised its inflation expectations: It now expects inflation to reach 2.7 percent by the end of the year, instead of the previously forecast 2.5 percent. The unemployment rate, however, is expected to rise only slightly. Fed Chairman Jerome Powell emphasized the current uncertainty: “The economy is fundamentally strong,” he said on Wednesday. At the same time, “uncertainty is exceptionally high.” A key factor is tariff policy. However, it remains unclear whether tariffs will only have a one-time impact on prices and thus only influence inflation in the short term.
Following the announcement of the Fed’s further course of action, the Bitcoin price rose again above the $85,000 mark. According to the analysis firm Coinmarketcap, Bitcoin was most recently trading at just over $85,500.
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