The Federal Reserve keeps monetary policy unchanged amid rising inflation and growth uncertainty linked to the Iran war.

Bitcoin Dips Following Fed Decision to Hold Rates Steady

Bitcoin fell sharply Wednesday after the Federal Reserve kept its benchmark fed funds rate unchanged at 3.50%-3.75%, in line with market expectations.

The cryptocurrency had already dropped nearly 4% ahead of the decision, weighed down by surging oil prices and disappointing inflation data. Following the announcement, bitcoin was trading around $71,600.

U.S. equities also retreated, with the Nasdaq and S&P 500 each down 0.55%, while the 10-year Treasury yield ticked higher to 4.21%.

In its statement, the Fed noted that “the implications of developments in the Middle East for the U.S. economy are uncertain.” The policy vote was 11-1, with Stephen Miran dissenting in favor of a 25-basis-point rate cut.

Updated Fed projections showed a notable rise in inflation expectations, now forecast at 2.7% for 2026, up from 2.4%, though inflation is expected to ease to 2.2% in 2027 versus 2.1% previously. The Fed’s “dot plot” indicates one 25-basis-point cut in 2026 and another in 2027.

The central bank faces the challenge of slowing employment growth while inflation remains above its 2% target. Geopolitical tensions, including a recent attack on Iran, have pushed oil prices near $100 per barrel, up from below $60 earlier this year.

Investors will look to Federal Reserve Chair Jerome Powell’s post-meeting press conference at 2:30 p.m. ET for further guidance on the Fed’s outlook.