The US Federal Reserve has maintained its interest rates, keeping them steady between 5.25% and 5.50%. This decision, made during the Fed's sixth meeting, comes with a cautious stance on potential rate cuts.

The Fed emphasized the need to wait until more confidence is built that inflation is moving towards the 2% target. According to the policy statement, the expected progress towards this goal has not been achieved in recent months, requiring a more cautious and potentially longer-term approach to interest rate policy.

Prolonged Caution Ahead

During the press conference, Fed Chair Jerome Powell acknowledged that the expected progress in the first quarter was not observed, indicating that reaching the desired confidence level may take longer. This suggests that the Fed may need more data and time before considering any rate cuts.

Powell's statements signal a continuation of the "higher rates for longer" approach, as the central bank maintains its cautious stance. This stance suggests that the Fed is willing to take a patient and deliberate approach to ensure that inflation is firmly on the path to the 2% target.

Cryptocurrency Reactions

Following the Fed's interest rate decision, the cryptocurrency market exhibited a mixed response. Meme coins like Bonk, Floki Inu, and dogwifhat experienced a slight recovery, gaining around 6% in value. However, Bitcoin and Ethereum showed relatively stable performance, with Bitcoin reclaiming the $58,000 level but still facing significant selling pressure.

The Fed's stance on "higher rates for a longer period" and the negative flows from US Bitcoin ETFs will be crucial factors to watch as the cryptocurrency market navigates the challenges of the second quarter.