Key Insights
Markets have been on edge as the US Fed holds a policy meeting between 18 and 19 March 2024.
A rate cut of 0.5% would lift the markets from recent lows.
A stable policy rate could further crash the markets to new lows.
A third distant possibility also emerges that there would be two rate cuts, and the Fed dismisses its possibility even in the next policy meeting.
Trump's trade war has led the markets to wonder whether uncertain markets will force the Federal Reserve to cut interest rates.
Crypto markets have seen very high bearish sentiments this week because of the uncertain macroeconomic condition in the US economy.
Between 18 and 19 March 2025, the US Federal Reserve will hold its next policy meeting, where it will evaluate whether to cut the interest rates or keep them constant at current levels (4.25% to $4.50%).
The decision is expected to have a deep impact on the global stock and crypto markets, as both of these have seen a worsening liquidity crisis in the current times.
Stock markets have shed value over a trillion dollars while crypto markets have corrected around 25% to 40%, with sectors like memecoins seeing a complete wipeout.
Last year, in December 2024, the US Federal Reserve Chairman Jerome Powell commented that the inflation in the US economy would remain around 3% throughout the year, denying the possibility of a rate cut anywhere in 2025.
The fear of a recession saw excessive withdrawals in the crypto markets, which corrected from $3.79 trillion in December 2025 to $2.73 trillion at press time, losing over $1 trillion in a quarter.
A rate cut at this point is also required in the US economy as Donald Trump imposed tariffs on most imports to the US including a 50% tariff on Canadian steel and an extra 20% tariff on all Chinese imports. The supply chain reset that took place as a result of these tariffs is expected to introduce a short-term recession in the US markets. To prevent such a recession, the US Fed might be forced to cut down on its prevailing interest rates.
Strong trade war, supply chain resets, immigration curbs, deportations, and government policy on industrial output remain key influencing factors for the US Federal Reserves in its next meeting two days later.
The most likely scenario is a stable policy rate with positive guidance. In simple words, it means that the US Federal Reserve would keep the rates constant (no hike or cut), but it will keep open the possibility for a rate cut in the near future.
This situation could lead to a full speed recovery in the crypto markets with top cryptos like Bitcoin crossing $95k, Ethereum above $2500, XRP crossing $3, and Solana above $175. However, we expect only a little recovery in the memecoin markets.
There is also a strong possibility that the US Fed will cut the interest rates by 0.25% and will announce the possibility of another rate cut around its next policy meeting, i.e., May 2025.
The possible rate cut this month could also be the only rate cut in the first half of 2025 because of inflation touching 3.1% against US Fed's target of 2%.
The second situation could show some positive changes in the market, but they would be insufficient to help a full recovery.
There is also a third but distant possibility that the US Federal Reserve only keeps an eye on inflation and lets the government handle the trade war, impending recession, and supply chain issues.
In such an event, crypto markets are expected to react sharply and shed prices falling back to October 2025 price levels.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.