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 Fed’s 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 risk

Powell 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 Trump’s 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 Group’s 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: CoinMarketCap

Bitcoin (BTC) dropped below $97,000 to $95,866 after Powell’s 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 low

On 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.

Peterson’s 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.”

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