Bitcoin Slides After Fed Holds Rates Amid Inflation and Middle East Concerns
Bitcoin fell sharply Wednesday after the Federal Reserve kept its benchmark fed funds rate unchanged at 3.50%-3.75%, matching market expectations.
The cryptocurrency had dropped nearly 4% ahead of the decision, pressured by rising oil prices and disappointing inflation data, and was trading around $71,600 following the announcement.
U.S. equities were lower as well, with the Nasdaq and S&P 500 each down 0.55%, while the 10-year Treasury yield edged up to 4.21%.
In its statement, the Fed highlighted uncertainty around the economic impact of recent developments in the Middle East. The policy vote was 11-1, with Stephen Miran dissenting in favor of a 25-basis-point rate cut.
Updated Fed projections showed inflation expectations rising to 2.7% in 2026 from 2.4%, before moderating to 2.2% in 2027. The central bank’s “dot plot” signals one 25-basis-point cut in 2026 and another in 2027.
The Fed faces a delicate balance: a slowing labor market, inflation above its 2% target, and geopolitical tensions that have pushed oil near $100 per barrel from under $60 earlier this year.
Investors now await Federal Reserve Chair Jerome Powell’s post-meeting press conference at 2:30 p.m. ET for further insights into policy direction.
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