The Federal Reserve held interest rates steady on Wednesday despite three policymakers voting for a quarter-point hike, while crypto prices showed little reaction.
The Federal Open Market Committee voted 9-3 to maintain the federal funds rate at a range of 3.5% to 3.75%.
The decision comes amid greater uncertainty than at the Fed's previous meeting. The probability of a quarter-point hike climbed as high as 35% on CME FedWatch earlier on Wednesday before falling ahead of the announcement.
The FOMC said the economy continued to expand at a "solid pace" despite uncertainty tied to conflict in the Middle East. It also pointed to strong productivity growth and capital investment, while noting that inflation remained above its 2% target, partly due to energy and other supply shocks.
Crypto prices were little changed in the hour following the announcement. Bitcoin (BTC) traded around $64,250, up 1% on the day, while ether (ETH) also climbed 1% to $1,915. XRP (XRP) stood out among the top 10 cryptocurrencies, gaining nearly 3% to $1.08.
Iggy Ioppe, chief investment officer at Theo, said cooling June inflation was not enough to overcome concerns about oil prices and disruptions tied to the U.S.-Iran conflict.
"Warsh has made it clear he will not be bounced by one print, and that approach makes sense in this environment," Ioppe said. "Every day they choose not to tighten is another day of effective easing. That remains supportive for risk assets over the medium term."
Ioppe added that renewed institutional inflows in spot bitcoin exchange-traded funds have yet to see a sustained recovery rally because the same geopolitical risks are also limiting crypto's upside.
Stephen Coltman, head of macro at 21Shares, described the decision as a "sigh of relief" for investors but warned that it could set up a difficult September meeting if inflation stays elevated.
Sygnum Bank Investment Strategist Can-Luca Köymen similarly said the decision shows the Fed wants to stay flexible.
"For crypto, the signal is that the macro backdrop stays restrictive for a while longer rather than that it deteriorates," Köymen said.
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