No Rate Cut, Low Monthly Cap on Treasuries From April: Fed

• The Federal Reserve has announced maintaining the rates at 4.25% to 4.50%.
• Jerome Powell stated that the agency would be reducing the Treasuries amount from April.
• Emphasizing high inflation, Powell stated that two rate cuts are possible in 2025. 

With the closure of the Federal Open Market Committee (FOMC) meeting on Wednesday, the cryptocurrency community will likely witness significant developments in the upcoming days. As expected, the Fed Reserve retained the rates at 4.25% to 4.50%, stating uncertainty had gained around economic outlooks recently. Further, the US Fed announced of reducing its monthly cap on Treasuries amount from April 1. 

Jerome Powell, the head of the U.S. Federal Reserve pinpointed several factors at the meeting, including inflation and tariffs. Powell pointed out that tariffs have given rise to inflation. With this, Powell drew attention to the economic outlook of the US and stated that the nation would likely see two rate cuts by the end of the year. Further, the US Fed sharply reduced the 2025 GDP growth to 1.7% from 2.1%. Also, the rate-setting panel projected the unemployment rate at 4.4%, citing inflation.

Considering the reductions imposed by the Fed, the cryptocurrency community was optimistic that the interest rates would not face any difference, and true to their predictions, the rates were maintained at the same target. Drawing attention to the Treasuries amount, Powell stated that the monthly cap would be reduced from $25 billion to $5 billion from April 1. Further, he stated that the odds of a recession have increased but are not high, indicating that the rise is likely due to the tariffs.

Related: Fed Governor Waller Backs Stablecoin Growth With Regulations

Earlier in February, President Donald Trump imposed 25% tariffs on Canada and Mexico while 10% was imposed on China. This move disrupted market sentiment wherein stocks and foreign currencies weakened with fears of inflation. Although Trump held back the tariffs on Mexico and Canada, the overall market sentiment to the update was low. Powell pointed out that surveys conducted by the Central Bank showed weak sentiments and predicted that tariff retaliation could be expected from other nations. 

DOGE Team Identifies ‘Magic’ Federal Computers

Ahead of the FOMC meeting, Elon Musk, who heads the Department of Government Efficiency (DOGE), had stated that his team identified over 14 computers with blank check authority, implying that they can provide unlimited cash. In a podcast hosted by Texas Senator, Musk emphasized that these ‘magic money’ computers were found in several government organizations including Treasury, Health, Human Services, and Defense. Further, he stated that the amount exhibited by the machines is not entirely correct as some have differences of 5-10%. Though Musk’s comments raised concern over the stability of fiat currency, it also signaled a spike in Bitcoin’s price. 

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