Bitcoin hovered around $104,200 on Wednesday after the Federal Reserve left its benchmark interest rate unchanged at 4.25% to 4.50%, in line with expectations.

While policymakers still project two rate cuts this year, they struck a cautious tone, citing rising inflation tied to tariffs as a reason to delay action.

The Fed’s updated economic projections, including its quarterly dot plot, showed officials expect the benchmark rate to fall to 3.9% by the end of 2025, implying 50 basis points of cuts this year. However, the pace of easing beyond that is slower than previously expected, with rates seen at 3.6% in 2026 and 3.4% in 2027.

At his post-meeting press conference, Chair Jerome Powell ruled out hikes as the base case but emphasized the need to wait for more clarity.

“We’ll make a smarter decision if we wait a couple of months,” he said, pointing to uncertainty around how much tariffs will affect inflation. He added that “the labor market is not crying out for a rate cut” and that current conditions allow the Fed to stay patient.

Other projections showed higher inflation expectations compared to March. The Fed now sees PCE inflation at 3% and core PCE at 3.1% for 2025. GDP growth was revised down to 1.4%, while the unemployment rate was projected to rise to 4.5% this year and remain elevated through 2026.

Bitcoin was little changed after the announcement, while US equity markets moved higher.

Share this article