- The Federal Reserve held interest rates steady at 3.50% to 3.75% for a second consecutive meeting, with the decision split among FOMC members.
- Amid uncertainty from the Middle East conflict and rising energy prices, the Fed adopted a hawkish slant and a data-dependent “wait-and-see” approach to future cuts.
- Major crypto prices like Bitcoin and Ethereum saw short-term declines following the Fed’s announcement, though both maintained weekly gains.
The Federal Reserve left its benchmark interest rate unchanged on Wednesday, maintaining a cautious stance as rising energy costs from Middle East conflicts threaten to complicate its ongoing battle with inflation. This decision, which was widely expected, leaves the target range at 3.50% to 3.75% for a second consecutive meeting.
Voting members of the Federal Open Markets Committee were split, with Stephen Miran advocating for a cut while the majority rallied around the pause. Consequently, the central bank highlighted its data-dependent approach, underscoring a crystallized “wait-and-see” strategy for future policy moves.
Meanwhile, the FOMC noted that “inflation remains somewhat elevated” and the implications of developments in the Middle East are “uncertain”. The committee’s median inflation forecast for 2025 increased during these deliberations, indicating a hawkish slant.
During his post-decision press conference, Chairman Jerome Powell warned that higher energy prices are likely to push up overall inflation. However, he stated it was too soon to know the potential scope and duration of the economic effects.
Bitcoin recently changed hands around $71,870, a 3.6% daily decrease, according to CoinGecko. Over the same period, Ethereum fell 5.3% to approximately $2,215, but both cryptocurrencies showed weekly gains of 1.6% and 7.2%, respectively. This price action followed a broader market decline on reports of strikes in Iran.
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