The Federal Reserve maintains interest rates unchanged, optimism over a three-rate cut this year boosts both stock market and cryptocurrency prices.

The Federal Reserve of the United States announced to maintain the interest rate at a high level of 5.25% to 5.5%, but stated that the risks to achieving employment and inflation goals are trending towards a better balance. The U.S. stock market surged, with the S&P 500 index historically breaking through the 5,200-point mark, and the Dow also closed at a new high. Bitcoin and Ethereum experienced a sell-off yesterday due to news of ETF outflows and difficulties with the approval of an Ethereum spot ETF, but they also rebounded later in the evening following the overall market sentiment.

FED Maintains Interest Rates, Expects Three Rate Cuts This Year

The Federal Reserve statement indicated that recent indicators suggest that economic activity has been expanding at a steady pace. Job growth remains strong, and the unemployment rate stays at a low level. Inflation has slowed down over the past year but remains elevated. The committee assesses that the risks to achieving its employment and inflation goals are becoming more balanced.

According to CNBC's report, Chairman Powell stated in a press conference after the meeting that even though inflation data for January and February rose, it did not alter the overall downward trend, only proving that inflation follows a non-linear path.

I believe they didn't really change the overall picture, that inflation is gradually declining to 2% on a bumpy road. We won't overreact to these two months of data, nor will we ignore them.

Powell reiterated that if the economy continues to grow, policymakers still intend to cut rates by the end of the year and expressed confidence in the Fed's 2% inflation target.

The rate dot plot released this time still shows the probability of three rate cuts this year, boosting investors' confidence in a rate cut in June. According to CME FedWatch data, investors believe the probability of a rate cut in June is over 70%, up from 50% two weeks ago.

Bitcoin and Ethereum Experience a Drop and Recovery Yesterday

Bitcoin, influenced by continuous outflows from Bitcoin spot ETFs in recent days, briefly dropped to $60,775 yesterday but gradually rebounded to above $67K in the evening along with positive market sentiment.

Bitcoin ETF outflows for two consecutive days, BTC fell below 61K, marking the largest single-day drop since the FTX incident

Ethereum also saw a decline to $3,056 yesterday, a 20% drop in a week. Analysis yesterday suggested that this could be due to reduced chances of an Ethereum spot ETF approval and the fading trend of re-collateralization. Fortune reported last night that the U.S. Securities and Exchange Commission (SEC) is conducting a thorough investigation into Ethereum and speculates that this is more than just a routine check; the SEC may be considering classifying Ethereum as a security, a decision that could have a significant impact on the dream of launching an Ethereum ETF.

However, ETH is still driven by overall market sentiment and has returned to around 3,500 points.

Reasons for Ethereum's 20% drop in a week? Difficulty of Ethereum spot ETF approval and fading trend of re-collateralization

Fortune: Ethereum under close scrutiny by the SEC, attempting to classify ETH as a security