On January 29, 2025, the Federal Reserve decided to keep interest rates unchanged at 4.25%–4.50%, a move widely expected by markets. The decision signals the Fed’s cautious stance as it monitors inflation and economic growth under President Donald Trump’s new administration.
How the markets reacted
1. Stocks pulled back slightly
Major stock indices dipped following the announcement. The S&P 500 slipped 0.47% to $601.81, while the Dow Jones edged down 0.29% to $447.18. Tech-heavy Nasdaq lost 0.17% to close at $520.83. Investors took a wait-and-see approach as they assessed the Fed’s steady stance alongside potential fiscal policy shifts.
2. Dollar strengthened
The U.S. dollar gained ground after the decision, with the dollar index rising 0.08% to 107.89. The greenback saw notable strength against the yen and euro, driven by ongoing speculation over new tariffs aimed at boosting domestic production.
3. Crypto held strong
Bitcoin climbed 2.35% to $105,283, while Ethereum gained 1.14%, trading at $3,196.18. With no immediate rate cut, investors continued to view crypto as a hedge against inflation and potential regulatory shifts under the Trump administration.
What’s next?
Markets are now looking ahead to key economic data and signals from the Fed on future rate cuts. With inflation and fiscal policies in focus, traders are keeping a close eye on how these factors will shape stocks, forex, and crypto in the coming months.
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