Macro Context and Inflation Trajectory

Core PCE inflation edged up to 2.7 % in June, still above the Fed’s stated 2 % target but well below last year’s 5 % peak. By standing pat, policymakers preserve flexibility while monitoring a labour market that added +168 000 jobs in June—its slowest pace since late 2023. The decision underscores a data-dependent stance that emphasises incoming price pressures over pre-emptive easing.

Immediate Reaction in Crypto Markets

Bitcoin hovered near $118 000—flat on the session—while Ethereum and large-cap altcoins posted sub-1 % moves. Historically, muted price action in the first 15 minutes following a policy release often gives way to pronounced swings once Chair Jerome Powell’s press conference clarifies the Committee’s bias. The last three FOMC pressers each triggered double-digit intraday ranges for BTC, highlighting the sensitivity of risk-on assets to nuance in Fed rhetoric.

Dovish-Vs-Hawkish Scenarios

If Powell signals that balance-sheet run-off could slow or that inflation risks are “better balanced,” traders may interpret a dovish pivot—opening the door to a 25-bp cut by September. Lower yields typically depress the dollar, reduce opportunity costs, and funnel liquidity into growth equities and digital assets. Conversely, renewed concern over tariff-driven inflation or geopolitical supply shocks would reinforce a hawkish tilt, reviving the dollar’s safe-haven bid and pressuring crypto-beta plays.

Political Overhang and Leadership Risk

Political headwinds loom large: President Trump has openly criticised Powell’s stewardship, hinting at leadership changes should economic conditions falter. A sudden shift at the helm could inject policy uncertainty, historically a tail-wind for decentralised stores of value such as Bitcoin. For context, BTC outperformed the S&P 500 by +420 % during the 2019-2020 period that spanned Powell’s initial conflict with the White House.

Market-Implied Rate Path

Fed-funds futures now imply a 54 % chance of a first cut in September, rising to 78 % by December. That glide-path pushes the effective rate toward 4.25 % by year-end—levels that historically coincide with a stronger bid for “risk dog” assets, including mid-cap crypto tokens.

Bottom Line

A steady $4.5 % policy rate leaves Bitcoin’s macro narrative intact: lower-for-longer real yields remain the catalyst for a sustained breakout above the $120 000 psychological ceiling. The next volatility spike is likely to coincide with Powell’s televised remarks at 18:30 UTC, where even subtle language shifts could set the tone for both Forex and crypto markets into Q3.