- The US Federal Reserve has kept its interest rates unchanged for the current policy meeting.
- Existing policy rates for repo and reverse repo are 4.25% to 4.50%.
- Effective Federal Funds Rate at 4.37%.
- High inflation at 2.7% in June is the main reason for keeping the rates unchanged.
- All cryptocurrencies except Bitcoin and Ethereum have been facing a severe liquidity crisis.
Policy Rates Unchanged at 4.37%
The US Federal Reserve has kept interest rates unchanged for the fifth time this year after Fed meetings in March, April, June, and July 2025. The effective federal funds rate remains unchanged at 4.37% while the repo rate and reverse repo rate are in a window of 4.25% to 4.50%.
The last Federal Reserve interest rate reduction of 0.25% happened in December 2024.
The next Federal Reserve Meeting is on September 16-17, 2025, and will be the third-last meeting of the year. After September, there are two meetings scheduled on October 28-29 and December 9-10 this year.
Why are Bitcoin and Ethereum Growing?
Bitcoin and Ethereum have been growing due to increased demand from corporate sectors. Bitcoin has seen its demand surge in the ETF markets and from companies like Strategy, Metaplanet, and GameStop, while for Ethereum, the demand has been surging from technology companies like Golem, Bitmine, and others.
Expectations from the Next Policy Meeting on September 16-17, 2025
The US Federal Reserve in its January 2025 meeting indicated that there is a likelihood of only 2 rate cuts and a maximum of 0.5% in 2025 due to inflation expectations of 3% throughout the year. Till date, i.e., August 2025, the inflation figures have remained higher than 2.4% with the latest report of June showing a CPI (inflation) of 2.7%.
All of these make it difficult for the US Fed to cut interest rates. The Fed has a mandate to keep inflation below 2% while ensuring there is proper growth in the job market. As the job market appears relatively stable, there is very little pressure on the US Federal Reserve.
However, since the policy meeting of September will be one of the last 3 meetings in 2025, there is a chance of at least a 0.25% rate cut, given that Jerome Powell continues as the chairman. If Powell resigns, Donald Trump might be looking at a 3% rate cut within the first half of 2026.
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