Fed Holds Rates at 3.50–3.75%, Powell to Stay as Markets and Crypto Sell Off amid Geopolitical Risks

The Federal Reserve voted to maintain its policy rate at 3.50%–3.75% in an 11–1 decision, citing persistent inflation and a cooling labor market; officials also raised their 2026 inflation projection to 2.7% in the updated outlook ^{[1] [2]}.

Markets entered a “sell-the-news” mode after the announcement: bitcoin fell nearly 4% to about $71,600 and U.S. equity indexes slipped, while traders reduced expectations for near-term rate cuts ^{[3] [1] [4]}.

Fed Chair Jerome Powell said he plans to remain at the Fed while the political dispute over the central bank plays out, and officials highlighted geopolitical risks — including rising Middle East tensions — as a factor in their assessment ^{[4] [1] [5]}.

The Fed’s pause and cautious guidance coincided with immediate selling in crypto and equities and diminished odds of an April rate cut, leaving markets lower on the day of the decision ^{[1] [3]}.