Fed Poised to Hold Rates Steady as Crypto Traders Eye Dot Plot for Clues

The U.S. Federal Reserve is widely expected to leave interest rates unchanged on Wednesday, with the policy decision set for release at 18:00 UTC, followed by Chairman Jerome Powell’s press conference at 18:30 UTC.

According to the CME Group’s FedWatch tool, the central bank is likely to keep rates anchored in the 4.25%-4.50% range, despite ongoing calls from President Donald Trump for lower borrowing costs.

With a rate hold largely priced in, the crypto market’s attention has shifted to the Fed’s dot plot—a chart that maps each official’s projections for future interest rates.

“Since rates are expected to remain steady, traders are focusing on the dot plot,” said crypto trading and market-making firm XBTO. “If there are fewer than two projected cuts, it would reinforce the higher-for-longer narrative. A dovish surprise, however, could weaken the dollar and reignite crypto buying. Until then, patience rules.”

A more hawkish outlook—signaling fewer rate cuts ahead—could weigh on bitcoin and the broader digital asset market. Bitcoin’s rally has already stalled above the $100,000 mark, as Middle East tensions and uncertainty around trade-war-driven inflation keep risk sentiment fragile.

“Expectations for rate cuts during 2025 have already been slashed from 100 basis points to just 50 basis points,” noted Matteo Greco, senior analyst at Fineqia. “This adjustment reflects a robust labor market and inflation that remains stubbornly above the Fed’s 2% target. If conflict in the Middle East drags on, anticipated cuts could fall further to only 25 basis points.”

While a hawkish Fed might introduce volatility for bitcoin in the near term, it could also worsen the U.S. fiscal picture by raising debt-servicing costs—ultimately enhancing the long-term attractiveness of alternative assets like gold and bitcoin.