Bitcoin Dips, Nasdaq Falls as Fed Holds Rates and Powell Prepares to Step Down

TLDR

• The Fed kept rates unchanged at 3.50%–3.75% for the fourth straight meeting
• Four dissents: three wanted to remove easing bias, one wanted a 25bp cut
• Jerome Powell’s term as Fed chair ends May 15; this was likely his last meeting
• Kevin Warsh cleared a Senate Banking Committee vote and is set to replace Powell
• Bitcoin dipped below $76,000 and the Nasdaq fell 0.35% following the decision

The Federal Reserve held its benchmark interest rate steady at 3.50%–3.75% on Wednesday. It was the fourth consecutive meeting without a change.

Officials said they are watching both persistent inflation and signs that the economy is slowing down. The Fed’s statement said it would “carefully assess incoming data, the evolving outlook, and the balance of risks” before making any moves.

There were four dissents on the rate decision. Fed Governor Stephen Mirran wanted to cut rates by 25 basis points.

The other three dissenters — Beth Hammack, Neel Kashkari, and Lorie Logan — wanted to hold rates but remove any language that signals future cuts. That puts pressure on whoever leads the Fed next.

This meeting was likely Jerome Powell’s last as chairman. His term ends on May 15.

Kevin Warsh, his expected replacement, passed a Senate Banking Committee vote on Wednesday. He is now on track to take over when Powell steps down.

The three hawkish dissents suggest Warsh may face pushback inside the Fed if he wants to cut rates. He will need to build consensus among members who are still worried about inflation.

Markets moved after the decision. Bitcoin fell about 0.5% over 24 hours, trading just below $76,000.

Stocks and Crypto React to Fed Decision

The Nasdaq dropped 0.35%. Treasury yields climbed, with the two-year note rising 9 basis points to 3.93% and the 10-year up 5 basis points to 4.40%.

Higher yields often put pressure on growth stocks and risk assets like crypto. The moves on Wednesday were modest but pointed in the same direction.

Oil prices added another layer to the Fed’s challenge. WTI crude was trading just under $105 per barrel, close to post-war highs.

Inflation vs. Growth: The Fed’s Challenge

Energy prices feed into headline inflation, which complicates the Fed’s job. Higher oil costs can also slow economic growth, leaving the Fed caught between its two mandates: controlling prices and supporting the economy.

Powell was expected to address the path for monetary policy at his post-meeting press conference. Traders were watching for any signal on the timing of future rate cuts or hikes.

The Fed did not commit to any direction. It said decisions will depend on incoming data and how the economic outlook develops.

Bitcoin was trading just below $76,000 at the time of the decision, while the Nasdaq held modest losses heading into Powell’s press conference.

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