U.S. policymakers keep rates unchanged while warning that the Iran war is complicating inflation and economic expansion

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.

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