The Federal Reserve held interest rates steady on Wednesday, leaving the benchmark federal funds target range at 3.5% to 3.75%, a move markets had overwhelmingly priced in ahead of the meeting.
A Widely Expected Decision
According to probabilities from the CME FedWatch Tool, traders assigned a 97%-99% likelihood to no change before the announcement. The decision extends the Fed’s ongoing pause as officials weigh easing inflation pressures against signs of a gradually softening labor market.
In its post-meeting statement, the central bank said economic activity continues to expand at a “solid pace” while inflation remains “somewhat elevated.” Policymakers acknowledged that uncertainty around the economic outlook is still high, reaffirming their commitment to the Fed’s dual mandate of maximum employment and 2% inflation.
Dissent Highlights Internal Debate
While the decision was largely unanimous, it was not without disagreement. Governors Stephen Miran and Christopher Waller dissented, favoring a 25-basis-point rate cut. The rest of the committee supported holding rates steady, signaling that while cuts are being discussed internally, a consensus has yet to form.
The split underscores the Fed’s delicate balancing act as it navigates slowing inflation without triggering unnecessary economic weakness.
Crypto Markets React Mutedly
Digital asset markets showed little immediate reaction to the announcement. Bitcoin briefly dipped from around $89,600 to $89,000 following the statement before recovering, last trading near $89,300.
Ethereum remained largely flat near $3,000, while Solana and XRP hovered around $126 and $1.90, respectively. The muted response suggested that traders had already priced in the outcome and were looking beyond the meeting for clearer signals.
Focus Shifts Beyond Near-Term Cuts
Ahead of the decision, Andrew Forson, president of DeFi Technologies, noted that the Fed’s rate path for the year remains a key variable for risk assets, including crypto.
He added that while stable or declining rates typically support liquidity, capital often rotates first into traditional safe havens during periods of heightened uncertainty.
Forson also emphasized that Bitcoin is still treated largely as a risk-on, tech-adjacent asset, which can delay inflows until volatility subsides and expectations around rates become clearer.
Attention Turns to Fed Leadership
Analysts at CF Benchmarks, a subsidiary of Kraken, said the meeting itself was unlikely to move markets, given the lack of surprise. Gabe Selby, head of research, noted that investor focus is increasingly shifting away from near-term rate decisions and toward broader institutional and political signals.
That attention is now extending to the future leadership of the central bank. Betting markets on Polymarket currently favor Rick Rieder as the next Fed chair at roughly 42%, ahead of Kevin Warsh at about 27%, after Rieder surged into the lead late last week.
What Comes Next
For now, the Fed has made it clear that policy decisions will remain data-dependent. Officials reiterated they will continue assessing incoming economic data, the evolving outlook, and the balance of risks before making any adjustments.
For crypto and other risk assets, the message was simple but familiar: no immediate catalyst, no sudden shift. Markets are now waiting for clearer signals-either from inflation data, labor market trends, or political developments-to determine whether the next move from the Fed is a cut, a longer pause, or something more unexpected.
