The Fed held rates at 3.5%-3.75% in Kevin Warsh's first meeting as chair, while raising its 2026 rate forecast, sending Bitcoin lower.
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The Federal Reserve held its benchmark interest rate steady at a range of 3.5% to 3.75% on June 17. It was the fourth consecutive meeting this year in which officials chose to hold rates rather than move them. The decision marked the first policy meeting led by new Fed Chair Kevin Warsh, who succeeded Jerome Powell after Senate confirmation last month.
In its statement, the Federal Open Market Committee described economic activity as expanding at a solid pace. The committee flagged elevated uncertainty tied partly to the conflict in the Middle East. It also cited supply shocks affecting certain sectors, including energy, as a factor keeping inflation above its 2% target.
Bitcoin (BTC) traded near $66,000 ahead of the announcement. The price fell to $64,800 in the minutes that followed the decision. It later settled around $65,300, a decline of just over 1% for the day. BTC remained up 5% for the week. Ethereum (ETH) gained 7.6% over the past seven days to reach $1,763. Solana (SOL) rose 13% to $73 over the same period. The S&P 500 and Nasdaq 100 each fell nearly 1%, erasing gains made earlier in the session.
A Hawkish Shift in Projections
Updated quarterly projections show officials moving toward a less accommodative stance. The median year-end forecast for the federal funds rate climbed to 3.8%, up from 3.4% in the March projection. Rate expectations for 2027 and 2028 also rose, to 3.6% and 3.4%, respectively. Both figures came in higher than prior guidance. Inflation projections increased as well. Personal consumption expenditures inflation is now expected at 3.6% for the year. Core PCE inflation is projected at 3.3%, up from a previous forecast of 2.7%.
Traders raised the odds of a July rate hike to 18% following the decision, according to CME FedWatch data. That figure marked an increase from earlier expectations. Weeks earlier, BTC had dropped after stronger-than-expected government employment data raised concerns about inflationary pressure on the Fed's dual mandate.
During his post-meeting press conference, Warsh said the committee's commitment to fighting inflation remains unambiguous and unanimous. He also announced five new task forces. The groups will cover Fed communications, the central bank's balance sheet, its use of data sources, the impact of emerging technologies on jobs and productivity, and the broader inflation framework.
The vote to hold rates was unanimous. Powell voted alongside Warsh despite a series of internal dissents over the past year from members favoring rate cuts. Warsh has previously criticized the Fed's reliance on forward guidance and its quarterly dot plot projections. Investors are watching closely for any changes to how the central bank communicates policy under his leadership.
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