While the Federal Reserve may hold off on cutting interest rates for the time being, ING suggests that when the rate cuts do finally occur, they could be more substantial than expected.

On Wednesday, the Federal Reserve kept its benchmark interest rate steady between 4.25% and 4.5%. In the accompanying press conference, Chairman Jerome Powell warned that the U.S. economy faces growing risks of stagflation, with inflation and unemployment continuing to pose challenges.

Market participants, both in traditional finance and cryptocurrency, were closely watching for signs that the Fed might cut rates soon, particularly with the June meeting on the horizon. According to ING, Powell’s comments, particularly about the “increased uncertainty” surrounding the economic outlook and “the rising risks of higher unemployment and inflation,” suggest that the Fed is likely to remain on hold for a few more meetings.

ING believes that the Fed will adopt a “wait-and-see” approach, avoiding any rate cuts until they are more certain about the economic data. As a result, the central bank may delay any action. However, ING also notes that once the Fed decides to cut rates, it could do so more aggressively than anticipated due to the delayed response. They expect this cautious approach could last until at least September.

ING also pointed out that the Fed’s hesitation to take action may stem from concerns about global trade tensions and supply chain disruptions, which could potentially fuel further inflation.

In the wake of the Fed’s decision, Bitcoin saw a sharp rally, rising from $96,000 to $99,500. This move was helped by President Donald Trump’s comments suggesting a potential trade deal with a major global economy, which boosted risk sentiment in the markets.