Key Highlights:
- The Federal Reserve held interest rates steady at 4.25%-4.5%, ignoring pressure from President Trump
- In a rate split, two Fed officials voted for a rate cut
- Bitcoin, Ethereum, and XRP fell after the Fed’s decision
The Federal Reserve shared a press release with its high-stakes decision on Wednesday, in which the agency shared its decision to maintain its benchmark interest rate at 4.25%-4.5% despite fierce criticism from President Donald Trump and rare internal dissent from two senior officials.
The 9-2 vote marks the first time since 1993 that multiple Fed governors have openly opposed a rate decision.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” the federal agency writes in a press release.
“The Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
This shows deepening divisions within the central bank as it expects slowing economic growth, persistent inflation, and mounting political pressure.
The decision comes after weeks of public attacks from US President Donald Trump, who has repeatedly accused the Fed Chair Jerome Powell of stifling economic growth by keeping borrowing costs too high.
Yet policymakers stood firm, emphasizing data-based caution over political demands.
In its official statement, the Federal Open Market Committee (FOMC) acknowledged that economic expansion had “moderated” in recent months, a major shift from its more optimistic June assessment.
On the other hand, the labor market remains robust, but inflation is still “somewhat elevated,” leaving the Fed in a holding pattern.
A Rare Split at the Fed
Governors Michelle Bowman and Christopher Waller broke ranks, advocating for an immediate rate cut to preempt potential weakness in employment and further disinflation.
Their dissent shows a growing debate within the Fed: Should it act now to support the economy, or hold tight to ensure inflation doesn’t reignite?
The U.S. president has repeatedly criticized Federal Reserve Chair Jerome Powell over several months, labeling him “stupid” and a “numbskull” while stating he should feel “ashamed.”
Crypto Market Stumble: Bitcoin, Ethereum, and XRP Drops
Equities wobbled following the announcement, with the S&P 500 dipping briefly before stabilizing. Treasury yields edged higher as traders scaled back bets on near-term rate cuts.
But the real fireworks were in the cryptocurrency market, where major cryptocurrencies like Bitcoin, which is already in a blistering bull run, experienced shockwaves.
The Federal Reserve’s decision sent immediate ripples through digital asset markets, with Bitcoin, Ethereum, and XRP all slipping into negative territory shortly after the announcement.
According to CoinMarketCap, figures show Bitcoin at $117,080, Ethereum at $3,775, and XRP at $3.10 as traders digested the implications of unchanged interest rates.
Interestingly, crypto-related equities bucked the downward trend, which maintains their positions despite the digital asset pullback. Strategy led the pack at $403.55, followed by Coinbase at $383.60 and Robinhood at $106.96.
Analysts believe that the Fed’s reluctance to cut rates is reinforcing Bitcoin’s appeal as a hedge against fiat monetary policy. When central banks delay easing, it fuels the narrative that traditional finance is trapped in slow-moving bureaucracy.
According to experts, Crypto thrives on that uncertainty. Investors are piling in because they see the Fed as either behind the curve or too politically constrained to act.
Historically, the crypto market reacts differently whenever the Federal Reserve decides to keep interest rates unchanged. For example, the Fed maintained interest rates at 4.25%-4.50% for the fourth consecutive meeting in June. At that time, Bitcoin remained stable near $105,000, and Ethereum traded around $2,500.
Also, broader crypto sentiment weakened slightly due to the Fed’s “higher-for-longer” stance, limiting liquidity inflows into speculative assets like altcoins and DeFi tokens.
Also Read: Trump’s Crypto Policy Arrives Without Bitcoin Reserve Mention
