TLDR
- The Federal Reserve held interest rates steady at 4.25%-4.5% as expected on Wednesday
- Two Fed governors dissented from the decision for the first time since 1993, preferring a 25 basis point rate cut
- Fed Chair Powell’s non-committal comments about September rate cuts reduced probability from 63% to 40%
- Bitcoin dropped 0.5% to $117,400 immediately after the announcement but has since recovered
- Crypto analysts suggest a slower bull market pace if the Fed maintains its cautious stance
The Federal Reserve maintained its benchmark interest rate range at 4.25%-4.5% on Wednesday, meeting widespread market expectations. The decision came as policymakers continue to navigate economic uncertainty and inflation concerns.
In an unusual move, two Fed governors broke from the consensus. Michelle Bowman and Chris Waller dissented from the decision, instead favoring a 25 basis point rate cut. This marks the first time two Fed members have dissented from a policy decision since December 1993.
šØ UPDATE: THE FEDERAL RESERVE chose not to cut interest ratesā¦
ā¦.but Jerome Powell and the boardās decision was DISSENTED by Fed Governors Waller and Bowman in favor of an interest rate cut.
This is a RARE time 2 governors dissent. Not since 1993.
THEY WERE CORRECT. Butā¦ pic.twitter.com/O87WmEwONO
— Eric Daugherty (@EricLDaugh) July 30, 2025
The Fed’s statement cited ongoing economic challenges. “Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” the central bank said. The statement also noted that unemployment remains low and labor market conditions stay solid, while inflation remains somewhat elevated.
Bitcoin reacted immediately to the announcement, falling nearly 0.5% to $117,400 in the minutes following the decision. The S&P 500 and Nasdaq indexes also slipped from earlier gains. However, crypto markets rebounded during Thursday morning trading in Asia.
Fed Chair’s Comments Dampen Rate Cut Expectations
Fed Chair Jerome Powell’s post-meeting press conference proved crucial for market sentiment. His responses were non-committal regarding potential rate cuts in September, leading to revised expectations among investors.
Powell emphasized that no decisions have been made about the September meeting. “We have made no decisions about September, we don’t do that in advance,” he stated during the press conference.
The Fed Chair pointed to increased tariffs showing up in consumer prices for some goods categories. He did not rule out maintaining current rates at the next Federal Open Market Committee meeting in September, adding that decisions would depend on economic data over the next two months.
Powell’s cautious stance came despite pressure from President Trump, who has called for lower interest rates. The Fed Chair maintained his wait-and-see approach as concerns grow that the ongoing trade war could reverse progress toward the central bank’s 2% inflation target.
US inflation currently sits at 2.7% and has increased for four consecutive months. Interest rates remain close to their highest levels in over a decade.
Market Reactions and Future Outlook
Before Powell’s press conference, the CME FedWatch tool showed a nearly 60% probability for lower rates in September. After his comments, this probability dropped to 40%, reflecting market disappointment with his non-committal stance.
“If the unemployment rate holds steady and tariffs push up inflation, it will be hard to justify a rate cut in the next few months,” said Bill Adams, chief economist at Comerica Bank.
Crypto analysts are watching these developments closely. Nick Ruck, director at LVRG Research, suggested that if the Fed maintains its cautious stance, “the bull market’s pace may slow, but the underlying liquidity surge could keep the floor intact for an eventual rebound.”
Apollo Capital’s chief investment officer Henrik Andersson noted that the market had already priced in no rate cut this week. He emphasized that uncertainty regarding tariffs will likely delay US rate cuts.
Despite the immediate market reaction, some analysts remain optimistic. The market still expects one to two rate cuts before year-end, and crypto markets have already begun recovering from Wednesday’s initial decline.
Total crypto market capitalization remained around $3.94 trillion, staying within a range-bound channel that has been trading sideways for the past two weeks. The Fed’s September meeting will now be closely watched for any shifts in monetary policy direction.
