Original author: BitpushNews Mary Liu
In the early morning of March 20th, Beijing time, the Federal Reserve will announce its latest interest rate decision, followed by Chairman Powell holding a press conference. The global market is waiting with bated breath.
Financial markets are facing many uncertainties. The special thing about this meeting is that it will comprehensively assess the impact of a series of new policies of the Trump administration on the US economy. Fed policymakers will discuss the progress of inflation control and decide whether to adjust monetary policy.
The market has been under pressure in advance, and Bitcoin has consolidated and fallen
The optimism lasted only a few days, as risk markets retreated again ahead of the Federal Reserve’s interest rate meeting. As of press time, Bitcoin is trading at around $82,715, down 1.5% in the past 24 hours.
Mainstream currencies such as Solana, Ethereum and XRP fell more significantly. The US stock market was also under pressure, with both the Nasdaq and SP 500 falling. Market concerns that the Federal Reserve may not immediately ease policy are growing. Although inflation data in February slowed down, the rate was not significant and it was only a single-month data.
The Federal Reserve is likely to remain on hold, but the dot plot holds a mystery
The market generally expects that the Fed will maintain the current target range of the federal funds rate of 4.25%-4.50%. According to the CME Groups FedWatch tool, traders believe that the possibility of a rate cut in March is very small.
Previously, Federal Reserve officials have repeatedly emphasized that they will adopt a wait-and-see attitude, partly because President Trumps economic policies have brought significant uncertainty, which has begun to affect business and consumer confidence and triggered stock market declines and concerns about a recession.
The focus of this meeting will be the Summary of Economic Projections released along with the policy statement, especially the much-watched dot plot. This chart will show the median forecast of the future federal funds rate by the 19 committee members, which is an important basis for the market to speculate on the future interest rate path.
Although Nomura Securities analysts expect the median forecast of the dot plot to not change much, given the nervous market sentiment and uncertainty about expectations for future rate cuts, any slight adjustments could trigger sharp market fluctuations.
Trumps policy fog: the shadow of stagflation looms, Wall Street sounds the alarm
Recent economic data and market sentiment have shown that analysts are beginning to worry about the risk of stagflation, which means that if there is bad news about the economy in the future, US stocks may also fall.
Simply put, people are worried that Trumps policies may lead to slower economic growth and rising prices, which is stagflation. Wall Street institutions have begun to worry about this and adjust their expectations.
Several institutions, including JPMorgan Chase, Goldman Sachs and Morgan Stanley, have recently lowered their economic growth forecasts for the United States, mainly because they believe that the Trump administrations restrictive trade and immigration policies may have an adverse impact on the economy.
Looking at inflation, although the February price index showed a slowdown in inflation, Goldman Sachs economists pointed out that the Federal Reserve may have to reconsider their inflation forecasts, given that the Trump administration has already started to impose tariffs and may increase them in the future. Goldman Sachs even predicts that the Federal Reserve may raise the core inflation rate to 2.8% in its economic forecast for 2025, while lowering the GDP growth rate to 1.8%, mainly due to the impact of tariff policies.
How does the Feds expectations affect the crypto market?
Cryptocurrencies such as Bitcoin are often considered risk assets and their price movements are closely related to investors risk appetite. In a high-interest environment, relatively safe assets such as bonds are more attractive, which may lead to capital outflows from high-risk assets such as cryptocurrencies. Currently, the price of Bitcoin is hovering around $83,000, and the market sentiment index is still in the fear range, which may mean that the market has anticipated potential negatives.
Economic uncertainty and global tensions could add to bearish pressure in the cryptocurrency market, according to predictions from Polymarket participants. Polymarket data shows there is a 51% chance that Bitcoin will close between $81,000 and $87,000 this week.
Summarize
The Feds policy statement and Powells speech will undoubtedly set the tone for the short-term direction of the cryptocurrency market. Dovish signals may ignite hopes for a market rebound, while hawkish stances may prolong the current downtrend. With market sentiment already pessimistic, any slightly positive signal may become a catalyst for price increases. However, for cryptocurrency investors, vigilance and caution are always the best strategies to deal with market volatility.
