From Cointelegraph

May 6, 2025 3:45 pm:

The US Federal Reserve Open Market Committee (FOMC) interest rate decision on May 7 could impact cryptocurrencies like Bitcoin (BTC) and altcoins. Analysts predict no change in interest rates, but potential liquidity injections to prevent a recession could lead to gains in crypto assets. The Fed faces pressure to lower rates from President Trump amidst signs of economic weakness.

Economist Jim Paulsen suggests a Fed interest rate cut may be necessary as the economy shows signs of moving towards a recession. Concerns about overheated markets persist despite consumer inflation exceeding the 2% target and low unemployment rates. Market expectations indicate a 76% chance of interest rates at 4.0% or lower by Sept. 17.

Investor confidence in the Fed’s willingness to ease monetary policy has waned, prompting the Treasury to potentially inject liquidity to support government spending. The recent $20.5 billion Treasury bond purchase on May 5 signals intervention, historically bullish for cryptocurrencies. The US Dollar Index has dropped, favoring scarce assets like Bitcoin as investors seek alternatives to cash.

Despite reduced expectations for multiple rate cuts, a more accommodative US monetary policy could still benefit cryptocurrencies. Pressure on the Fed to expand its balance sheet may lead to inflation and devaluation of fixed-income investments, supporting crypto assets. Gold has risen over 12% in the past 30 days amid declining confidence in the US Treasury’s ability to finance its debt.

Read more at Cointelegraph: Bitcoin could rally regardless of what the Federal Reserve FOMC decides this week: Here’s why