Bitcoin Falls as Fed Holds Rates Amid Inflation and Geopolitical Risks

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

The cryptocurrency had already fallen nearly 4% ahead of the announcement, pressured by rising oil prices and disappointing inflation data, and was trading around $71,600 following the decision.

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

The Fed highlighted uncertainty over the economic impact of Middle East developments. The policy vote was 11-1, with Stephen Miran dissenting in favor of a 25-basis-point cut.

Fed projections showed inflation expectations climbing to 2.7% in 2026 before moderating to 2.2% in 2027. The “dot plot” indicates one 25-basis-point cut in 2026 and another in 2027.

Investors now await Fed Chair Jerome Powell’s 2:30 p.m. ET press conference for further guidance.