The Federal Reserve’s January rate decision underscored a sharp turnaround in easing expectations, a shift that has weighed on crypto prices.

The central bank held interest rates steady on Wednesday, cementing a move away from earlier market bets that had pointed to an early 2026 rate cut.

“Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the Fed said in its policy statement, adding that inflation “remains somewhat elevated.”

The decision drew two dissents. Stephen Miran, a recent Trump appointee, and Chris Waller—both seen as potential successors to Chair Jerome Powell—favored a 25-basis-point reduction in the federal funds rate.

Markets took the decision in stride. Bitcoin hovered just below $89,500, U.S. equities were little changed, and the dollar strengthened sharply after the previous day’s decline. Gold continued its rally, rising 3.7% to trade near record highs around $5,300 per ounce.

The outcome marked a stark contrast to expectations just weeks ago. Two months earlier, prediction markets had priced the odds of a January rate cut above 40%. Those expectations faded through late November, and by the time of this week’s meeting, markets were pricing a hold with nearly 99% certainty, reinforcing the view that policy will remain restrictive through the first quarter.

While the January decision effectively shuts the door on near-term cuts, expectations for easing later in the year remain. CME FedWatch data show just a 16% chance of a rate cut in March, with the probability rising to about 30% by April.

“The Fed’s decision reflects lingering inflation pressures alongside a stabilizing economy,” said Nick Ruck, director of LVRG Research, in a Telegram message. “That backdrop is likely to keep near-term volatility elevated in crypto markets.”

Ruck added that a “higher-for-longer” tone from Powell, or signals of fewer rate cuts in 2026, could put additional short-term pressure on risk assets, including bitcoin.