The US Federal Reserve left its benchmark interest rate unchanged at 4.25% to 4.50% during its May 7, 2025, meeting, citing the need for more economic clarity before adjusting policy. 

The FOMC decision aligns with market expectations and signals a wait-and-see approach as inflation stabilizes and growth slows.

Crypto Market Liquidity Conditions Likely to Remain Unchanged

Crypto markets reacted calmly to the FOMC announcement, with Bitcoin trading near $96,300 and Ethereum holding $1,800 at the time of the decision. 

Traders are now focused on Fed Chair Jerome Powell’s press conference for any signs of a shift toward future rate cuts.

The central bank’s statement acknowledged recent economic softness, including a 0.3% GDP contraction in Q1, but pointed to a still-resilient labor market and inflation moving toward its 2% target. 

This balanced view suggests the Fed is unlikely to tighten further unless inflation reaccelerates.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further,” the US Federal Reserve said.

For crypto investors, a steady interest rate helps preserve current market conditions. Risk appetite may hold, especially if Powell signals that cuts are possible later this year. Lower rates generally support crypto assets by weakening the dollar and improving liquidity for alternative investments.

Tokenized US Treasuries and yield-bearing stablecoins remain key narratives, as on-chain liquidity continues shifting toward real-world asset platforms offering returns that track traditional rates. 

A prolonged pause by the Fed could sustain this trend while keeping institutional capital engaged in the crypto space.

Markets now await upcoming CPI and jobs data to gauge the Fed’s next move. Any confirmation of easing inflation or economic weakness could build the case for a rate cut in the second half of 2025—potentially giving crypto another leg up.