Federal Reserve’s Upcoming Meeting: Impact on Bitcoin and SPX

The FOMC May 2025 rate decision might affect Bitcoin, SPX, and even notable Solana-based meme coins. The question is whether Powell’s decision to pause or cut rates will ignite a crypto surge.

Overview: The Federal Open Market Committee is set to conclude its two-day meeting on May 7, where they will announce if a rate cut, hike, or no change at 4.50% is warranted.

Eyes on the Federal Reserve

Forty-five minutes following the rate decision, Jerome Powell will host a press conference where he will respond to media inquiries.

Typically, such announcements introduce volatility in crypto prices, but Powell’s press conference has a stronger influence on market movements. Analysts will closely monitor his responses for hints regarding monetary policy direction in the coming months.

According to the CME FedWatch Tool, there is a 97% probability of rates remaining unchanged at 4.50%.

However, a rate cut initiated by the FOMC could lead to a surge in cryptocurrency and Bitcoin prices, with the S&P 500 potentially climbing beyond $6,000. Some cryptocurrencies may break previous resistance levels, resulting in a total market capitalization exceeding $3 trillion.

Conversely, maintaining or increasing rates may negatively impact Bitcoin and some of the top meme coin ICOs scheduled for May.

The Interest Rate Pause

Should current predictions hold steady, keeping rates unchanged will mark the third successive meeting without alterations. The last rate cut took place in December 2024, reducing rates from 5.5%.

Powell has indicated that the U.S. economy is robust, despite inflation remaining above the desired target of 2%.

SPX Surge Mirrors Crypto Boom: What’s Next?

SPX prices bottomed out at $4,837 earlier this month, surging following Donald Trump’s announcement of a 90-day tariff pause aimed at fostering negotiations. A successful trade agreement with China could drive SPX prices above $5,800.

Kevin O’Leary, known as Mr. Wonderful, remarked:

“Everybody would like to see deal one inked. Deal one would calm the markets, calm my investors, and calm all the companies I’ve invested in.”
Translation: A successful trade agreement would stabilize investor sentiment.

Should these developments unfold favorably, Bitcoin could potentially soar past $100,000, bringing numerous cryptocurrencies to new peaks, following a challenging Q1 2025.

Key insights for the FOMC Meeting:

• The May 7 rate decision remains critical; will the Fed reduce rates?
• Powell’s decisions can either catalyze a rally or trigger a sell-off in equities.
• Economic forecasts predict rates will hold at 4.50%.
• There’s hope that Bitcoin will gain and breach $100,000.