Fed holds rates steady as Bitcoin and Ethereum trade flat ahead of Powell remarks

The U.S. Federal Reserve held interest rates unchanged on Wednesday, 28 January, maintaining its target range for the federal funds rate at 3.50%–3.75%, as policymakers signalled continued caution amid elevated inflation and an uncertain economic outlook.

In its first interest rate decision in 2026, the Federal Open Market Committee said economic activity continues to expand at a solid pace. Job gains have remained low and the unemployment rate has shown signs of stabilisation.

Inflation, however, remains “somewhat elevated,” reinforcing the Fed’s data-dependent stance.

Policy stance remains restrictive, with no signal on timing of cuts

The Committee reiterated its commitment to returning inflation to its 2% target. It would continue to assess incoming data when considering the “extent and timing” of any future policy adjustments.

Officials did not offer guidance on when rate cuts might begin, nor did they signal concern about current financial conditions.

The statement emphasised that uncertainty around the economic outlook remains elevated, with the Fed prepared to adjust policy if risks emerge that could impede its dual mandate of maximum employment and price stability.

Crypto markets show muted initial reaction

Major crypto assets showed limited immediate reaction following the decision, with traders appearing to wait for further clarity from Chair Jerome Powell’s press conference later in the day.

Bitcoin was trading around $89,000, broadly flat on the session and remaining below its short-term moving averages after weeks of choppy price action.

The asset has struggled to regain upside momentum since its November pullback, with recent sessions characterised by consolidation rather than directional conviction.

Ethereum followed a similar pattern, hovering near $3,000 and also trading below its 20-day and 50-day moving averages. Like Bitcoin, ETH’s price action suggests caution rather than a decisive response to the policy announcement.

Markets await Powell for directional cues

The lack of an immediate move across crypto mirrors behaviour seen in traditional markets during recent Fed meetings, where initial reactions to the policy statement have often been subdued ahead of the press conference.

Investors will be watching Powell’s remarks for any nuance on inflation progress, labour market conditions, or financial stability that could influence expectations for the path of rates in the coming months.

Until then, the Fed’s decision keeps monetary conditions restrictive and liquidity expectations largely unchanged.

Final Thoughts

• The Fed held rates at 3.50%–3.75%, maintaining a cautious, data-dependent stance amid elevated inflation.
• Bitcoin and Ethereum traded flat following the announcement, with markets awaiting further signals from Powell’s press conference.