Fed Holds Rates Steady; Bitcoin and Ether Slip

The Federal Reserve left its benchmark interest rate at 3.5%–3.75% on Wednesday. Bitcoin slipped about 1% to roughly $63,890 and Ethereum fell about 1% to just above $1,900 shortly after the Fed released its decision at 2 p.m. ET.

The Federal Open Market Committee’s decision matched market expectations and marked the fifth consecutive policy hold since a 25-basis-point cut in December 2025. The committee did not publish an updated Summary of Economic Projections or a new dot plot. Updated projections are scheduled for the Sept. 16, 2026 meeting.

In its statement, the Fed noted the economy is “expanding at a solid pace” while inflation remains above the central bank’s 2% target, in part because energy prices have risen amid recent events in the Middle East. The statement provided limited new guidance on the likely path of rates.

Chair Kevin Warsh has pledged to provide less “forward guidance” than his predecessors, reducing the number of signals investors receive about future policy. At the June meeting, nearly half of committee members indicated support for a rate increase before year-end. Three regional Fed presidents-Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas-voted against holding the rate and favored an immediate 25-basis-point increase.

Geopolitical developments also influenced markets. An Iranian attack and subsequent U.S. and Saudi retaliatory strikes on Iranian-backed forces in Iraq left at least 20 people dead. Energy prices rose ahead of the Fed announcement, which officials cited as a factor keeping inflation pressures elevated. U.S. equities sold off in response to the combination of hawkish dissent and the geopolitical developments.

The Fed adjusts its benchmark rate to affect borrowing costs and economic activity. Higher rates generally make loans and credit more expensive, which can reduce spending; lower rates tend to make higher-yielding, riskier assets relatively more attractive to investors.

With no new economic projections released on Wednesday, market participants will await the September meeting for updated forecasts. Traders will continue to watch incoming economic data, comments from Fed officials and further geopolitical developments for signals about future policy.