Bitcoin Holds Steady as Fed Leaves Interest Rate Intact

Bitcoin ticked down only slightly after the U.S. central bank left the Federal funds rate intact, as analysts had widely expected amid uncertain inflation readings and the Fed’s cautious rhetoric in recent months.

BTC was recently trading at $117,777, off just 0.1% over the past hour, according to crypto markets data provider CoinGecko, remaining relatively steady following the announcement. The largest cryptocurrency by market capitalization is down about 4% since hitting a record high near $123,000 two weeks ago.

“Markets are parsing Powell’s remarks closely, and so far, his tone suggests the Fed is still in wait-and-see mode,” Joe DiPasquale, CEO of crypto asset manager BitBull Capital, wrote in a text to Decrypt, although he called Powell’s acknowledgment of a decline in services inflation “encouraging.”

But DiPasquale added that “mention of tariffs pushing up goods prices reinforces that inflation isn’t fully tamed. For crypto, this likely means more sideways action in the near term unless we get a clearer signal on timing for rate cuts.”

Ethereum, the second largest digital asset by market value, was changing hands at $3,809, down a few fractions of a percentage point following the decision. XRP and Solana also ticked down. ETH has been outperforming BTC and other major coins over the past three months.

The interest rate remained in a range between 4.25% and 4.50%, but two board governors dissented from the decision, preferring to cut the rate by a quarter point.

Both Federal Reserve Governor Christopher Waller and Michelle Bowman, who’s now vice chair for Supervision, had signaled recently that they supported reducing the rate. Dissents are rare. The last time a Fed governor offered an objection was last September when Bowman preferred a 0.25% cut instead of the half-point on which the bank settled.

In comments following the decision, Federal Reserve Chair Jerome Powell said that current inflation readings were “little changed from the beginning of the year,” but noted that despite the drop-off in services inflation, “increased tariffs are pushing up prices in some categories of goods.”

Powell added: “A reasonable base case is that the effects on inflation could be short lived, reflecting a one-time shift in the price level, but it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed.”

The Fed has not made a decision about a rate cut at its next meeting in mid-September, and would weigh two sets of inflation and employment data.

“It’s been a very dynamic time for these trade negotiations and lots and lots of events in the intermeeting period,” Powell said. “But we’re still, you know, a way from seeing where things settle down.”

Most major cryptocurrencies have been in a holding pattern as investors weighed the impact of U.S. President Donald Trump’s global trade war, unsettling inflationary signs and wider macroeconomic uncertainties. The June Consumer Price Index, released earlier this month, ticked up 0.3% from the previous month to 2.7% annually. Those numbers were the highest since the February report and far above the Federal Reserve’s longstanding 2% goal.

The report and assorted other price and employment data suggested that inflation remained naggingly obstinate and that Trump’s tariffs were starting to have an effect. Earlier this year, markets had been optimistic about the prospect of multiple rate cuts this year, which would buoy crypto prices by freeing capital for investment.

But Powell has remained unbending about basing policy decisions on data. The CME FedWatch tool, a widely watched measure of rate sentiment, calculated a nearly 97% probability that the central bank would keep rates unchanged and a better than 50% chance of a cut in only one of its subsequent three meetings in 2025.

Powell’s stance has rankled President Trump, who has hammered Powell relentlessly, insulting his intelligence and musing about firing him. Last week, he became just the fourth president to visit the Federal Reserve in what appeared to be the latest attempt in his pressure campaign.

“Well, I’d love him to lower interest rates,” he said, responding to a reporter’s question at one point.

BitBull’s DiPasquale wrote in a text Tuesday that the market had “already largely priced in a hold from the Fed this month,” and that investors would be looking more at Powell’s comments in his post-announcement press conference, and any changes in the bank’s expectations.

“The real focus will be on Powell’s tone and any shifts in the dot plot,” DiPasquale said. “If he signals confidence that inflation is easing, risk assets–including crypto—could rally. But if the messaging is more hawkish or implies fewer cuts ahead, we could see a pullback. Either way, crypto’s reaction will likely track broader macro sentiment in the immediate aftermath.”

He added: “Inflation trends, ongoing trade tensions like tariffs, and geopolitical risks in Ukraine and Gaza are all contributing to a cautious backdrop, but they’re more of a secondary influence unless something escalates.”

Editor’s note: This story was updated after publication to add more detail plus comments from Powell and DiPasquale.