On January 29, 2025, the Federal Reserve decided to keep its benchmark interest rate unchanged, pausing its easing campaign after three consecutive cuts. Initially, the price of Bitcoin fell sharply following the announcement but later rebounded to a three-day high, indicating a volatile reaction in the crypto market. The federal funds rate is currently set between 4.25% and 4.50%. Fed Chair Jerome Powell emphasized that there is no rush to adjust monetary policy amidst a gradually improving economic outlook and cooling inflation, which has seen a significant drop since the high of 9.1% in 2022. Trump's recent comments at the World Economic Forum, where he urged the Fed to lower rates, have added pressure on central bank policymakers. Despite the fluctuating inflation rates, the Fed flagged that expanding the labor market remains a priority. Bitcoin's price spiked to around $103,800 after the initial drop, demonstrating the market's sensitivity to the Fed's decisions and economic signals.

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