The Federal Reserve held interest rates steady for a second consecutive meeting, maintaining its benchmark rate between 3.50% and 3.75%. The decision was split, with one FOMC member advocating for a cut, as the central bank cited elevated inflation and an uncertain economic outlook due to Middle East conflicts. Following the announcement, Bitcoin traded around $71,870 and Ethereum at $2,215, both showing daily declines but weekly gains.
The Federal Reserve held its benchmark interest rate steady on Wednesday, maintaining a cautious stance amid rising energy costs. The federal funds rate remained unchanged at a target range of 3.50% to 3.75%.
Voting members of the Federal Open Markets Committee were split for a sixth policy meeting in a row. Although most rallied around leaving borrowing costs untouched, Stephen Miran advocated for a 25-basis-point interest rate cut.
In its official statement, the FOMC noted that “inflation remains somewhat elevated” and job gains have remained low. The Fed highlighted a data-dependent approach to future interest rate cuts, underscoring a “wait-and-see” approach.
The backdrop was marked by the U.S.-Israel war with Iran, which has caused energy prices to surge. “Uncertainty about the economic outlook remains elevated,” the FOMC said, adding that “the implications of developments in the Middle East for the U.S. economy are uncertain.”
During a post-decision press conference, Jerome Powell warned that higher energy prices are likely to “push up overall inflation, but it is too soon to know the scope and duration of the potential effects on the economy.” Regarding rate projections, Powell noted a handful of policymakers shifted from projecting two cuts to one this year.
Bitcoin recently changed hands around $71,870, a 3.6% decrease over the past day, according to CoinGecko. Over the same period, Ethereum had fallen 5.3% to $2,215.
Wednesday’s gathering was Powell’s penultimate policy announcement before his term ends in May. Former Fed Governor Kevin Warsh is expected to succeed him, if confirmed by the U.S. Senate.
