Bitcoin Drops After Fed Holds Rates Steady Amid Inflation and Geopolitical Tensions
Bitcoin tumbled Wednesday following the Federal Reserve’s decision to keep its benchmark fed funds rate at 3.50%-3.75%, as widely expected.
The cryptocurrency had already fallen nearly 4% ahead of the announcement, pressured by rising oil prices and disappointing inflation data. After the decision, bitcoin traded around $71,600.
U.S. equities also dipped, with the Nasdaq and S&P 500 down 0.55% each, while the 10-year Treasury yield inched higher to 4.21%.
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 cut.
Updated Fed projections showed inflation expectations rising to 2.7% in 2026 from 2.4%, before easing to 2.2% in 2027. The central bank’s “dot plot” suggests one 25-basis-point cut in 2026 and another in 2027.
The Fed is navigating a slowing labor market, inflation above its 2% target, and geopolitical risks that have driven oil near $100 per barrel, up from under $60 earlier this year.
Investors now turn to Fed Chair Jerome Powell’s post-meeting press conference at 2:30 p.m. ET for further guidance.
