Bitcoin Steady Above $104K as Fed Holds Rates, Signals Slower Economy and Persistent Inflation
Bitcoin hovered slightly above $104,000 on Wednesday, as markets absorbed fresh signals from the Federal Reserve about ongoing inflation concerns and a slower growth outlook.
As broadly anticipated, the Fed kept its benchmark interest rates unchanged at 4.25%-4.50% during its June policy meeting.
“Despite some fluctuations driven by net exports, recent data suggests the economy is still expanding at a solid clip,” the Fed said in its statement. “Labor market conditions remain strong, but inflation continues to run somewhat elevated.”
Alongside the rate decision, the Fed released updated economic projections. Its so-called “dot plot” — a chart tracking policymakers’ interest rate expectations — showed that officials continue to see the fed funds rate ending 2025 at around 3.9%, signaling about 50 basis points of cuts this year, matching the March forecast. However, they now expect rates to decrease more gradually in the following years, projecting 3.6% in 2026 and 3.4% in 2027, indicating fewer cuts than previously anticipated.
The Fed also downgraded its forecast for U.S. economic growth, now predicting GDP to grow 1.4% in 2025, down from 1.7% in the March outlook. Inflation projections moved higher, with the Fed now expecting PCE inflation and core PCE inflation to hit 3% and 3.1%, respectively, compared to earlier forecasts of 2.7% and 2.8%. Meanwhile, the unemployment rate is now forecast to rise to 4.5% this year and remain at that level into 2026, slightly higher than previous projections.
Bitcoin (BTC) held mostly unchanged following the Fed’s announcement, trading at around $104,200. U.S. stock indexes, including the S&P 500 and Nasdaq, moved higher after the decision.
“The Fed’s latest projections point toward stagflation pressures — an environment where growth slows even as inflation and unemployment stay stubbornly high,” said David Hernandez, crypto investment specialist at digital asset manager 21Shares.
Hernandez noted that such conditions have historically weighed on traditional markets and fiat currencies but may boost bitcoin’s appeal due to its scarcity, decentralized design, and detachment from U.S. economic output.
“In periods like this, investors naturally search for assets that can preserve value and offer upside potential,” Hernandez said. “That’s why many are increasingly looking at bitcoin as a safe haven.”
