The U.S. Federal Reserve’s decision to maintain interest rates at 4.25-4.5% on May 7, 2025, sparked a brief rally in Bitcoin prices before settling. The announcement came from the Federal Open Market Committee (FOMC) in Washington D.C. 1 2 This move highlights the significant impact of monetary policy decisions on cryptocurrency markets, with analysts attributing Bitcoin’s price movement to broader market sentiments and investor expectations. 3 4 The decision comes amidst ongoing trade tensions and inflation pressures, which the Fed emphasized as key concerns while outlining their commitment to maximum employment and curbing inflation. 5 President Donald Trump had previously advocated for rate cuts, but the Fed maintained a neutral stance. 7 The CME FedWatch Tool predicted this rate pause with near certainty, driving increased trading activity in crypto markets with Bitcoin’s price briefly exceeding $97,000 before retracting after the announcement. 8 No significant DeFi liquidity stress was observed. 9 Notably, past Fed rate pauses have often triggered short-term volatility in Bitcoin prices. This time is no exception, and experts believe that market movements will align with future communications from the Federal Reserve regarding its monetary policy direction.