Tldr:
- The Fed voted 12-0 to keep interest rates at 3.5-3.75%, but raised inflation expectations and slowed its expectations for rate cuts.
- Bitcoin fell 2.2% to $64,150, while Ethereum fell 3.6%, with XRP and Solana each losing about 3%.
- The GMCI 30 fell 2.6%, pushing its year-to-date decline to nearly 36% across the broader market.
- Warsh abandoned Powell’s style of forward guidance, opting for shorter, fact-based statements without any market direction.
Cryptocurrency markets fell on Wednesday after the Federal Reserve kept interest rates steady but provided a hawkish policy forecast.
The Federal Open Market Committee voted 12 to 0 to keep the interest rate target at 3.5% to 3.75%. The decision came during Kevin Warsh First meeting as Fed Chairman.
Updated forecasts pointed to a slowdown in future interest rate cuts, rattling risk assets across the board. The prices of Bitcoin, Ether, and several altcoins fell between 1% and 3% after the announcement.
Markets react to a tightening policy signal
Bitcoin trading near $64,206 As of writing, it is down approximately 2.54% over the previous 24 hours. Ether shed 2.8%, While both XRP and Solana fell by about 3% according to CoinGecko data. Hyperliquid’s HYPE token, which hit a new all-time high just a day ago, fell 1.5% to $72.
The GMCI 30 index, which tracks the 30 largest cryptocurrencies by market capitalization, fell approximately 2.6%. The move extended its year-to-date decline to nearly 36%. Traditional safe-haven assets were not spared either, with gold down 2.2% and silver down 4%.
Matt Mina, chief cryptocurrency research strategist at 21Shares, framed the broader picture: “Taken together, the picture is one of… Crypto market Absorbing the tightening macroeconomic backdrop as rotation continues and real demand emerges with the strongest names.
The price fixing itself was widely expected and mostly priced in before the meeting. What surprised markets was the tone of the updated economic outlook summary, which cited persistent inflation concerns despite easing geopolitical tensions and lower energy prices.
Warsh charts a new course for Fed communications
Wednesday’s meeting represented more than just a rate decision — it provided the first look at Warsh’s communication style as president.
His policy statement was noticeably shorter than those issued under the previous president Jerome Powell. It also dropped advance directive language that Powell had consistently used throughout his term.
Warsh described the new format as focusing on presenting “facts” rather than guiding market expectations. This approach is consistent with his long-standing skepticism toward forward guidance, which he said unnecessarily ties the Fed’s hands.
Mina addressed the weight of the occasion directly, saying, “The Fed’s decision to suspend interest rates was entirely expected, but it carried unusual weight as the first meeting chaired by Kevin Warsh.”
“The real signal came from the updated forecasts,” he added, pointing to revised forecasts that suggest policymakers remain wary of inflation pressures despite some easing on the energy front.
The panel’s updated dot plot represents a meaningful shift from the March forecast. Policymakers now see a slower path toward lower interest rates than they did just three months ago.
This pivot, combined with Warsh’s leaner communication style, has set a more cautious tone for markets heading into the second half of 2026.
