Bitcoin holds near $64K as Fed keeps rates steady, September hike remains in play

Bitcoin [BTC] traded near $64,000 after the US Federal Reserve left interest rates unchanged at 3.50%-3.75% on July 29, a decision that largely matched market expectations.

However, policymakers struck a more hawkish tone than the headline suggested. Three Federal Open Market Committee [FOMC] members voted for an immediate rate increase. 

At the same time, Chair Kevin Warsh declined to rule out another hike in September, keeping pressure on risk assets, including cryptocurrencies.

Three Fed officials break ranks

The FOMC voted 9-3 to keep interest rates unchanged.

Beth Hammack, Neel Kashkari and Lorie Logan dissented in favour of raising the federal funds rate to 3.75%-4.00%, marking a notable shift from June, when all 12 voting members supported leaving policy unchanged.

The accompanying statement described economic activity as continuing to expand at a solid pace, with labour market conditions remaining stable.

At the same time, officials said inflation remains above the Fed’s 2% target, citing persistent price pressures partly reinforced by energy-related supply disruptions.

The Fed’s implementation note left its operational interest rates and balance-sheet policy unchanged.

Warsh keeps September firmly on the table

During his press conference, Warsh rejected suggestions that July represented a routine pause, describing the meeting as an active assessment of the Fed’s policy options rather than the start of an easing cycle.

He also downplayed the significance of June’s softer inflation reading, saying it influenced policymakers “not much” as they continue to focus on broader inflation trends.

While Warsh stopped short of signalling a September increase, he acknowledged that higher interest rates could still become necessary if inflation fails to moderate.

He also noted that financial conditions had already tightened between meetings, pointing to higher nominal and inflation-adjusted Treasury yields despite no change in the policy rate.

Those market developments, he said, would be monitored alongside incoming economic data rather than treated as policy signals in their own right.

Attention now shifts to the Fed’s Jackson Hole Symposium in August, where Warsh indicated he could provide further guidance on the economic outlook ahead of the September meeting.

Bitcoin reaction remains subdued

Bitcoin traded around $63,850 following the decision after fluctuating between roughly $63,516 and $64,640 during the session.

The muted reaction suggests investors had already priced in both the rate hold and the possibility that policymakers would maintain a cautious stance on inflation.

Even so, the meeting did little to improve the near-term outlook for risk assets.

If incoming inflation and employment data continue to support the Fed’s hawkish stance, expectations for a September rate increase could strengthen. That would likely keep pressure on Treasury yields and the US dollar upward while limiting liquidity conditions that have historically supported Bitcoin and the broader crypto market.

Final Summary

• The Federal Reserve left interest rates unchanged, but three policymakers voted for an immediate increase, highlighting a more hawkish split within the committee.
• Bitcoin remained near $64,000 as investors shifted their attention to Jackson Hole and the possibility of another rate hike in September.