Bitcoin returns to $98K as Fed holds rates steady despite Trump’s demand

Bitcoin has reclaimed $98,000 for the first time in almost three months after the US Federal Reserve said it would keep interest rates the same for another month.The Feds decision to keep interest rates unchanged comes despite mounting pressure from US President Donald Trump, who just weeks ago threatened to fire Fed chair Jerome Powell for being too late in cutting rates.Fed cites higher unemployment, inflation riskPowell said on May 7 that the Federal Reserve rate-setting committee held rates in the 4.25% to 4.50% range due to the rising risks of higher unemployment and higher inflation.He added inflation has come down a great deal but has been running above our 2% longer objective. Powell said surveys in households and businesses showed a sharp decline in sentiment mainly due to concerns over Trumps trade policy.However, Powell said that despite heightened uncertainty, the economy is still in a solid position. In the days leading up to the announcement, data from CME Groups FedWatch Tool indicated that the futures market expected minimal odds of a rate cut.Powell said the unemployment rate remains low, and the labor market is at or near maximum employment. The market expects the Fed to drop the Fed funds rate to 3.6% by the end of 2025.Bitcoin fell below $96,000 before retracing back above $98,000 just hours later on May 7. Source: CoinMarketCapBitcoin (BTC) dropped below $97,000 to $95,866 after Powells speech, but it shot up to tap $98,000 for the first time since Feb. 21 just hours later.Bitcoin momentum has been building, with the Crypto Fear Greed Index returning to Greed territory, and spot Bitcoin exchange-traded funds (ETFs) posting inflows of almost $4.41 billion since March 26.Related: Bitcoin price rallied 1,550% the last time the BTC risk-off metric fell this lowOn March 9, network economist Timothy Peterson warned that if the Fed holds off on rate cuts in 2025, it may cause a broader market downturn, potentially dragging Bitcoin back toward $70,000.Petersons forecast came after Powell said in March that we do not need to be in a hurry and are well-positioned to wait for greater clarity.Magazine: Adam Back says Bitcoin price cycle is 10x bigger, has empathy for ETF buyersThis article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.