Ripple falls over 1% amid concerns about the US economy
Ripple slid on Wednesday after the Federal Reserve’s policy statement raised concerns about the US labor market and inflation.
In a step that wasn’t surprising, the Fed decided to maintain interest rates unchanged at below 4.5%, due to ongoing economic uncertainty.
The statements asserted the FOMC continues to monitor risks closely, and believes that unemployment and higher inflation risks are on the upside.
The statement hinted that tariffs threaten higher prices and could slow growth, which opens the door to the scenario of inflationary recession.
Most Fed policymakers believe the central bank is in a good position to hold off modifying policies until clear data presents itself.
The Fed’s decision comes as the US administration engages in intense talks with trade partners to reach deals within the 90-day pause on reciprocal tariffs that Trump provided.
Recent data painted a worrying picture, with GDP contracting by 0.3% in the third quarter as imports surged with consumer and government spending reduced.
However, employment continued to grow strongly with the economy adding 177 thousand new jobs in April, while unemployment held at 4.2%.
On inflation, it continues to approach the Fed’s 2% target, but the tariffs could lead to a transient rise in prices.
Ripple
On trading, Ripple fell 1.1% on Coinmarketcap as of 21:19 GMT to $2.11.
Euro declines after a difficult win for German Chancellor Merz
The euro fell in European trade on Wednesday against a basket of major rivals, on track for the first loss in four days against the US dollar on growing concerns about the political situation in Germany after a difficult vote for the new German Chancellor Friedrich Merz.
Later today, the important Federal Reserve’s policy meeting is expected to provide clues on the path ahead for US interest rates.
The Price
The EUR/US price fell 0.35% today to $1.1325, with a session-high at $1.1374.
On Tuesday, the pair rose 0.45%, the third profit in a row as the odds of a June interest rate cut by the ECB fell.
Merz
During a vote in the German Parliament yesterday, the first session to vote failed to vote in German Chancellor Friedrich Merz for the first time in post-war Germany
It was surprising as the governing coalition has more than enough votes for a majority, showing some dissent.
The failure of the vote caused a shock and division among the Christian coalition, with some calling for an immediate second vote and others fearing the repeat of failure.
The Second Vote
During the hurriedly arranged second vote, Merz managed to get 325 votes, enough for a majority, thus being elected the German Chancellor.
However, the failure of the first vote caused concerns about the stability of the coalition and Merz’s ability to unite his parties.
The Fed
Today, the Federal Reserve will decide on monetary policies, expected to hold interest rates unchanged.
The Fed’s monetary statement and Chair Powell’s subsequent press conference will likely provide clues on the path ahead for policies.
US President Donald Trump continued to pressure Powell to cut interest rates, however he said won’t fire him before the end of term in May 2026.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.
The odds of such a cut in June stood at a healthier 65%.
Yen gives up one-week high before Fed's decisions
The yen fell on Wednesday in Asian trade away from a week high against the dollar, and on track for the first loss in four days amid improving risk appetite in the markets following the launch of initial US-China trade talks in Switzerland.
Later today, the important Federal Reserve’s policy meeting is expected to provide clues on the path ahead for US interest rates.
The Price
The USD/JPY price rose 0.6% today to 143.31, with a session-low at 142.41.
The yen rose 0.9% on Tuesday, the third profit in a row, hitting a week high at 142.35 on active haven demand.
Positive Sentiment
Most Asian stock markets rebounded on Wednesday after China announced new monetary policy decisions while commencing trade talks with Washington.
The People’s Bank of China cut interest rates from 1.5% to 1.4%, while reducing reserve requirements for banks by 50 basis points.
Media outlets reported an upcoming meeting between US Treasury Secretary Scott Bessent and Chinese officials this week in Switzerland.
The Fed
Today, the Federal Reserve will decide on monetary policies, expected to hold interest rates unchanged.
The Fed’s monetary statement and Chair Powell’s subsequent press conference will likely provide clues on the path ahead for policies.
US President Donald Trump continued to pressure Powell to cut interest rates, however he said won’t fire him before the end of term in May 2026.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.
The odds of such a cut in June stood at a healthier 65%.
Goldman Sachs said in a memo that Fed officials would like more evidence from the labor market and other sectors before deciding to cut interest rates, with the bank expecting three 0.25% rate cuts in July, September, and October.