Bitcoin recovers $ 85,000 after slowing down the Fed signals in quantitative tightening

Bitcoin (BTC) recovered the threshold of $ 85,000 following the median forecast of the Federal Open Market (FOMC) committee of 50 drops in basic points of interest rates in 2025.

In addition to pointing out potential rate decreases, the federal reserve has announced its intention to slow down the pace of its balance sheet, also known as the quantitative tightening (QT), from April 1.

The monthly ceiling on treasury bills without replacement will be reduced to $ 5 billion, down compared to the previous limit of $ 25 billion. The announcement has caused an increase in world markets, including crypto.

Bitcoin went from $ 84,235.71 to almost $ 86,000 before settling at $ 85,363 from press time, based on cryptoslate data.

Despite the price increase of almost 2% bitcoin, not all the main altcoins reacted strongly. Ethereum (ETH) is at a price of $ 2,039.11 after a positive variation of 0.6% during the same period, and Cardano (ADA) obtained a slight growth of 0.5%.

Meanwhile, XRP and BNB have shown practically no price variation. However, Solana (soil) crossed the threshold of $ 130 and was negotiated at $ 133.55 from press time.

The president of the federal reserve, Jerome Powell, stressed that the decision should not be interpreted as a broader change in policy, but rather as a technical adjustment to ensure smooth operation of the market.

Fed rate path

Updated projections reveal a more cautious position among the members of the FOMC concerning the pace and extent of the rate reductions. Median forecasts bring the interest rate to around 3.9% by the end of the year.

Nine political decision -makers anticipate two reductions in 2025, down compared to 10 in December, while eight are now waiting for a single or no reduction, an increase of four in previous forecasts.

Meanwhile, two members provide three discounts, a decrease of five in December and none more than three rate reductions.

Longer -term expectations remain largely unchanged. The median forecasts for the rate of federal funds at the end of 2026 are 3.4%, while the projection of 2027 was 3.1%. The longer -term estimate of the Fed of the neutral interest rate remains stable at 3%.

In addition, the Fed’s latest economic forecasts indicate slow economic growth. The median projection of GDP of 2025 was revised downwards to 1.7% against 2.1% in December.

The forecast of the unemployment rate for 2025 increased slightly to 4.4%, against 4.3%, signaling the expectations of a modest softening of the labor market.

The central bank has also adjusted inflation projections upwards, expecting the rate of inflation of personal consumption expenditure (PCE) reached 2.7% in 2025, against the previous estimate of 2.5%. The inflation of the basic PCE, which excludes food and energy, should reach 2.8%, compared to previous forecasts of 2.5%.

Impact of prices

During his press conference after the meeting, Powell responded to concerns about inflationary pressures, in particular the impact of prices.

He noted that significant part of recent inflation increases could be attributed to factor -related factors, but said their long -term impact remains uncertain.

Powell has also described inflation focused on prices as “transient” but recognized the difficulty of assessing its effects. He reiterated that the Fed is monitoring economic data for any sign of weakness, but stressed that political decision -makers are not going to reduce rates.

With persistent inflationary pressures and a slowdown in economic growth, the latest projections of the Fed indicate a more measured approach to monetary policy adjustments.

The central bank’s desire to slow down quantitative tightening while maintaining a prudent position on rate reductions reflects an act of equilibrium between maintaining economic stability and inflation control.

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