The Federal Reserve announced on Wednesday that it would maintain the benchmark interest rate at 3.5% to 3.75%, largely in line with market expectations. Following the announcement, the cryptocurrency market reacted cautiously, with Bitcoin and Ethereum experiencing slight short-term declines, and risk assets as a whole under pressure.
Crypto assets fell after the resolution
Following the announcement of the resolution, Bitcoin initially fell by about 1%, trading around $63,890; Ethereum also retreated by about 1%, dropping to above $1,900. Because the meeting did not simultaneously release new economic forecasts or a dot plot, the market had limited tradable information, resulting in relatively restrained price fluctuations.
This marks the fifth consecutive time the Federal Reserve has kept interest rates unchanged since its 25-basis-point cut in December 2025. Since Kevin Warsh took over as Fed chairman, he has consistently reduced forward guidance, resulting in less information about the future path the market gleans from official statements.
Inflation remains above the 2% target.
In its post-meeting statement, the Federal Reserve said the U.S. economy continues to expand at a solid pace, but inflation remains above the 2% target. The statement also noted that the situation in the Middle East has pushed up energy prices, contributing to recent price pressures.
This statement is equally important for the crypto market. High interest rates typically increase funding costs and suppress risk appetite. For highly volatile assets like Bitcoin and Ethereum, the market is more concerned about whether expectations of renewed interest rate hikes will emerge.
The September meeting will be the next point of observation.
At the June meeting, nearly half of the Federal Open Market Committee members expressed support for another rate hike before the end of the year. Recent high oil prices have also put more pressure on the decline in inflation. As a result, the market is beginning to reassess the policy direction of the September meeting.
At this meeting, Cleveland Fed President Beth Hammark, Minneapolis Fed President Neal Kashkari, and Dallas Fed President Lori Logan voted against an immediate 25-basis-point rate hike. This was one of the more pronounced hawkish divisions since Warsh became chairman.
Meanwhile, the situation in Iran is also causing market turmoil. The report noted that prior to the resolution announcement, oil prices rose by nearly $4 to $83 per barrel, further intensifying market concerns about inflationary pressures.
Additional information:The next FOMC meeting is scheduled for September 16, 2026, at which time the Federal Reserve will release updated economic projections and a new dot plot.
