Fed Holds Rates; Bitcoin Falls After Warsh’s First Decision

The Federal Reserve left its benchmark federal funds rate at 3.5%–3.75% on Wednesday, marking the fourth pause this year. The decision was the first policy action under Chair Kevin Warsh. Bitcoin fell after the announcement, trading near $65,300 and finishing the day down just over 1%.

The Federal Open Market Committee’s brief statement said economic activity is “expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” and pointed to supply shocks in sectors including energy. The statement added, “The Committee will deliver price stability.” Officials also noted continued stability in the labor market.

Policymakers left rates unchanged while they monitor incoming economic data and developments that have tightened global oil supplies. Markets have reacted to recent strong employment reports, which had earlier raised expectations that the Fed could resume rate increases.

Cryptocurrencies moved unevenly around the Fed decision. Bitcoin was down slightly on the day but about 5% higher over the past week. Ethereum traded around $1,763, up 7.6% over seven days, and Solana was about $73, up roughly 13% for the week. Investors have watched monetary policy closely because higher interest rates tend to reduce demand for risker assets.

Warsh assumed the Fed chair role amid political scrutiny; his confirmation faced opposition from some lawmakers connected to an investigation involving the outgoing chair. Market participants will watch upcoming inflation reports, employment data and energy-market developments for signs the Fed may resume tightening policy.