Fed holds interest rates, markets hardly react

In a highly anticipated move, the Federal Reserve chose to hold interest rates at their existing level on Wednesday following the Federal Open Market Committee two-day policy meeting.

The rate hike pause marks the central bank‘s sixth since consecutively raising interest rates from March 2022 to July 2023. Persistent inflation and a healthy labor market contributed to central bankers’ decision to hold rates, they said.

“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” Wednesdays statement read. “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

Stocks and cryptocurrencies were little changed on the news. Bitcoin (BTC) traded sideways in the moments after the Fed released its statement at 2 pm ET, sitting around $57,786 at time of publication, per Coinbase. The largest cryptocurrency is down about 4% over the past 24 hours.

Ether (ETH) similarly traded flat, hovering around $2,900 at time of publication – about 1% lower over 24 hours.

The Nasdaq Composite and S&P 500 indexes inched marginally higher on the news, managing to move just barely into the green after an otherwise disappointing trading session.

Bitcoin has hovered below $60,000 since early Wednesday, a downward trend analysts say is poised to continue.

“A break to the downside through $59,200 in BTC has led to an accelerated selloff and, barring an unforeseen catalyst, there seems little in the way of this market testing the [$53,000] area before a meaningful turnaround,” Mike Tauckus, head of trading and structuring at BitOoda, said.

Analysts will be looking for signs from Fed Chair Jerome Powell, who is set to speak at 2:30 pm ET, and other central bankers about when rate cuts may begin. Markets on Wednesday expected about a 9% chance a rate cut will come in June, according to data from CME Group.