Bitcoin remained steady around $89,000 on Wednesday following the Federal Reserve’s decision to maintain interest rates, bringing an end to its recent cycle of rate cuts. Earlier in the day, the cryptocurrency had surpassed the $90,000 mark but experienced a decline to approximately $89,500 concurrent with Federal Reserve Chair Jerome Powell’s remarks during his post-meeting press conference.
The Federal Reserve announced that the benchmark federal funds rate would stay within a range of 3.5% to 3.75%. This decision marks a pause after three consecutive 25-basis-point cuts in the last quarter of the previous year. The Fed indicated a growing confidence in the economy’s trajectory, despite inflation remaining above the targeted level. Policymakers pointed to slowing job growth and persistent price pressures as factors informing their choice to halt further easing. The Federal Open Market Committee voted with a majority of 10–2, dissenting votes coming from Governors Stephen Miran and Christopher Waller, both of whom favored an additional quarter-point cut. Miran, whose term is set to expire soon, has consistently advocated for more aggressive rate reductions, while Waller, a potential candidate for the role of Fed chair, last dissented during July’s meeting.
In the wake of the Fed’s announcement, Bitcoin traders seemed to adjust their expectations regarding possible near-term rate cuts rather than responding to potential tightening measures. Historically, Bitcoin has reacted favorably to easing financial conditions, and Powell’s statements implied a less hawkish stance. He noted that the economy continues to expand at a “solid pace,” with job gains having remained modest and unemployment starting to show stabilization. Inflation concerns were acknowledged, although Powell clarified that factors like tariffs were contributing significantly to elevated prices and these impacts could be more short-lived.
In addressing inflation, Powell indicated that core personal consumption expenditures inflation stands at 2.9% year over year, exceeding the Fed’s 2% target. He expressed a belief that the effects of tariffs would eventually diminish, provided there are no new trade actions introduced.
Amid the Fed’s meeting, questions regarding its future leadership loomed, especially with news of President Trump potentially announcing a new Fed chair shortly. In response to an inquiry about advice for his successor, Powell emphasized the importance of the central bank’s independence, recommending that they stay removed from political influences while maintaining engagement with Congress.
The potential candidates for the role are under close scrutiny from markets sensitive to shifts in monetary policy, with Rick Rieder currently favored to succeed Powell according to betting odds, followed by Kevin Warsh and Christopher Waller. The evolving situation within the Fed is being monitored closely by crypto investors as any leadership changes may significantly influence market dynamics in the near future.
