The Federal Reserve held interest rates steady at 3.5%–3.75% on Wednesday, meeting near-universal market expectations and leaving crypto markets to digest a muted response—even as equities sold off on a combination of hawkish dissent and a geopolitical shock.
The price of Bitcoin dipped around 1% to $63,890 following the Fed's announcement while Ethereum similarly fell by about 1% , now trading for just above $1,900.
It's the fifth consecutive hold since the committee cut rates by 25 basis points in December 2025—the last move Jerome Powell made before Kevin Warsh, Trump's pick for Fed chair, took over. Since then, rates haven't moved. Neither has Warsh's communication style: he's pledged to share less "forward guidance" than his predecessors, meaning markets get fewer signals about what's coming next.
That last part matters for crypto. Nearly half of FOMC members signaled at the June meeting they'd support a rate hike before year-end. Oil has been trading above $100 a barrel in recent weeks, keeping price pressure alive. A September hike is no longer off the table—and markets know it.
The Federal Reserve adjusts interest rates when economic data—inflation, employment, growth—points toward overheating or slowdown. When rates go up, borrowing gets more expensive: mortgages, business loans, and credit card debt all cost more, slowing spending and, in theory, cooling prices. When they go down, cheaper credit tends to encourage risk-taking and investment. For assets like crypto, lower rates historically act as a tailwind—money flows toward higher-yielding bets when safe alternatives pay less. The reverse is also true: even the threat of a hike tends to pressure prices lower.
The Iran attack was also weighing on markets: Oil climbed nearly $4 to $83 before the decision was released, adding to inflation pressures that gave the hawks their argument. At least 20 people were killed in joint U.S. and Saudi Arabian retaliatory strikes on Iranian-backed forces in Iraq.
The next FOMC decision is September 16, 2026, when the committee will publish updated economic projections and a new dot plot.
