Fed holds interest rates steady, crypto markets shrug as focus shifts to new chairman

The U.S. Federal Reserve held interest rates unchanged on Wednesday, maintaining its benchmark federal funds target range at 3.5% to 3.75%, a decision that markets had widely anticipated, as pricing from the CME FedWatch Tool showed a 97%–99% probability of no change heading into the meeting.

The decision extends the Fed’s pause as policymakers weigh cooling inflation against signs of a gradually softening labor market.

In its post-meeting statement, the Fed said economic activity has continued to expand at a “solid pace,” while inflation remains “somewhat elevated” and uncertainty around the outlook is still high. The committee reiterated its commitment to its dual mandate of maximum employment and 2% inflation.

The decision drew dissents from Governors Stephen Miran and Christopher Waller, who favored a 25-basis-point rate cut, while the rest of the committee voted to hold rates steady.

Crypto market reaction

Crypto markets showed a muted reaction.

Bitcoin (BTC) briefly fell from around $89,600 to $89,000 following the announcement before recovering some losses, last trading near $89,300, according to The Block price data.

Ethereum (ETH) was largely unchanged at roughly $3,000, while Solana and XRP hovered near $126 and $1.90, respectively.

In its statement, the Fed reiterated its commitment to its dual mandate of maximum employment and 2% inflation, saying it would continue to assess incoming data, the evolving outlook, and the balance of risks when considering future policy adjustments.

Fed focus shifts beyond cuts

Ahead of the decision, Andrew Forson, president of DeFi Technologies, said the Fed’s rate path this year still remains a key variable for risk assets, including digital assets.

"Markets are navigating elevated volatility, and the Federal Reserve’s rate path remains a key driver for risk assets, including digital assets," Forson said. Stable or declining rates generally support liquidity and risk appetite, though capital often rotates first into traditional safe havens during periods of heightened uncertainty.

Bitcoin, Forson added, is still widely treated as a risk-on, tech-adjacent asset, which can delay inflows until volatility eases and rate expectations become clearer.

Similarly, commentary from CF Benchmarks, a subsidiary of Kraken, framed the meeting as unlikely to deliver a policy surprise, with attention instead turning to broader institutional and political signals.

"With markets not pricing any rate change, the meeting itself was unlikely to move markets," said Gabe Selby, head of research at CF Benchmarks, in comments shared ahead of the decision.

Looking beyond the meeting, Selby said markets are increasingly focused on Fed leadership rather than near-term rate changes.

Betting markets on Polymarket currently favor Rick Rieder as the next Fed chair at roughly 42%, ahead of Kevin Warsh at about 27%, after Rieder moved into the lead late last week.