Bitcoin, Ethereum Waver as Fed Holds Interest Rates Steady

The Federal Reserve held its benchmark interest rate steady on Wednesday, maintaining a cautious stance as rising energy costs threaten to complicate its ability to balance ongoing price pressures with a cooling US labor market.

The federal funds rate was unchanged at a target range of 3.50% to 3.75%. The decision, which was widely expected, extended a pause that began at the end of the Fed’s January policy meeting after a series of rate cuts late last year.

Bitcoin recently changed hands around $71,870, down 3.6% in the past day Coin gecko. During the same period, Ethereum was down 5.3% to $2,215. Yet both cryptocurrencies showed gains of 1.6% and 7.2% respectively in the past week.

The voting members of the Federal Open Markets Committee (FOMC) were divided for the sixth straight policy meeting. While most supported the idea of ​​leaving borrowing costs unchanged, Stephen Miran argued for a 25 basis point rate cut.

In its official statement, the FOMC noted that “inflation remains somewhat elevated” and that job growth has remained low, even as the unemployment rate rose to 4.4% in February.

The Fed emphasized a data-driven approach to future rate cuts, underscoring a wait-and-see attitude that emerged among most policymakers in January.

The backdrop surrounding the Fed’s latest policy meeting was marked by the US-Israeli war with Iran, which has caused energy prices to rise sharply in recent weeks. Earlier in the day, Bitcoin fell along with US stocks after reports that the world’s largest gas field in Iran was hit.

“Uncertainty about the economic outlook remains high,” the FOMC said. “The implications of developments in the Middle East for the US economy are uncertain.”

The Fed typically focuses on underlying inflation in the U.S. economy, preferring a measure that ignores volatile food and energy costs. In the 12 months ending in January, the personal consumption expenditure price index rose 3.1%, up from 3% a month earlier.

Editor’s note: This story is current and will be updated with additional details. It was also corrected to note that only one member was in favor of a rate cut.