The Fed Maintains Interest Rates, Bitcoin Drops 1%

The Federal Reserve maintained interest rates between 4.25% and 4.50% on Wednesday, while removing previous language acknowledging progress on inflation from its statement.

The Federal Reserve left interest rates unchanged on Wednesday, maintaining them in a range of 4.25% to 4.50%. The central bank also removed previous language acknowledging progress on inflation from its statement.

The move comes as the Fed pivots to a data-dependent approach, with Chair Jerome Powell indicating that future rate adjustments will be contingent on incoming information, labor market trends, and inflation developments.

Bitcoin dropped 1% after the Fed’s announcement but held above the $100,000 mark, trading just below $102,000. The digital asset had briefly dipped below $100,000 earlier in the week after the launch of China's DeepSeek AI wiped out $1 trillion in global market value.

The central bank noted solid economic growth and stable low unemployment levels, suggesting no immediate need for rate cuts. The meeting also marks the first Federal Open Market Committee gathering under Donald Trump's second term, with the president pushing for lower borrowing costs.

However, the Trump administration's proposed 25% tariffs on Mexico and Canada, as well as a temporarily blocked federal spending freeze, add complexity to the economic outlook.