Bitcoin and Ethereum traded steadily on Wednesday after the United States Federal Reserve opted to keep its benchmark interest rate unchanged, a decision that was broadly anticipated by markets but revealed growing divisions among policymakers.
The Federal Open Market Committee voted to maintain the federal funds rate within the 3.50% to 3.75% range, reinforcing the central bank’s cautious, data-driven stance as it continues to weigh labour market strength against lingering inflationary pressures. The pause comes after three consecutive quarter-point rate cuts late last year, which were aimed at guiding the economy towards a soft landing without reigniting inflation.
In its post-meeting statement, the Fed acknowledged that economic uncertainty remains elevated. While job gains have slowed and the unemployment rate appears to be stabilising, inflation is still above the central bank’s long-term target. Officials reiterated that future decisions would depend heavily on incoming data rather than a predetermined policy path.
The vote, however, was not unanimous. Two members of the committee, Stephen Miran and Christopher Waller, both appointed by President Donald Trump, dissented in favour of a further 25-basis-point rate cut. Miran’s term is set to expire later this month. Their opposition reflects ongoing disagreement within the Fed over how quickly borrowing costs should be lowered as inflation eases but has not yet fully retreated.
Federal Reserve Chair Jerome Powell struck a measured tone during his press briefing, suggesting that the central bank now faces less strain than it did late last year. He noted that the tension between supporting employment and containing inflation has eased somewhat, with both upside inflation risks and downside economic risks appearing more balanced than before.
The meeting marked the Fed’s first policy gathering of 2026 and unfolded amid political uncertainty, with President Trump expected to nominate a successor to Powell ahead of the chair’s term ending in May. Powell also addressed recent legal developments, describing a criminal investigation involving federal prosecutors as an attempt to undermine the independence of the central bank.
Economic policymakers continue to grapple with incomplete data, partly due to disruptions caused by last year’s government shutdown. The Fed has also flagged changes in immigration and trade policy as additional factors complicating its outlook.
According to the Bureau of Labor Statistics, the US unemployment rate stood at 4.4% in December, only marginally lower than November’s revised figure. Inflation over the same 12-month period measured 2.7%, remaining above the Fed’s target but well below recent peaks.
Against this backdrop, Bitcoin hovered near $89,500 while Ethereum traded around $3,000, with both assets posting modest gains over the past 24 hours. Lower interest rates are generally supportive of risk assets, as declining Treasury yields push investors towards higher-return alternatives. Market expectations currently point to June as the most likely timing for the Fed’s first rate cut of the year.
