Crypto Traders Await Feds Interest Rate Dot Plot for Key Insights

The Federal Reserve's Open Market Committee, consisting of 12 officials, is set to announce its decision on interest rates at 18:00 UTC on Wednesday, with Chairman Jerome Powell's press conference following half an hour later. Despite President Donald Trump's persistent calls for lower borrowing costs, the CME Group's FedWatch tool suggests that the central bank is likely to maintain its stance and keep interest rates unchanged in the range of 4.25%-4.50%. The rate decision is a foregone conclusion, and crypto traders are likely to focus on the interest rate dot plot – the graphical representation that records each Fed official's projections for interest rates. A hawkish dot plot, suggesting fewer rate cuts, could put pressure on bitcoin and the broader crypto market. BTC's rally has already stalled above $100,000, with geopolitical tensions in the Middle East adding to the trade war-led inflation uncertainty. During 2025, expectations for rate cuts have already declined sharply, from an initial 100 basis points to just 50 basis points currently. This revision is driven by a resilient labor market and inflation that, while moderated, remains above the 2% target. A prolonged conflict in the Middle East could further reduce anticipated cuts to just 25 basis points, according to Matteo Greco, senior analyst at Fineqia. While a hawkish Fed could breed downside volatility in bitcoin, it will likely worsen the U.S. fiscal situation by adding to the nation's debt servicing costs and thereby strengthening the long-term appeal of assets like gold and bitcoin. In this context, traders are advised to remain patient and focus on the dot-plot for any potential surprises from the Fed.