Crypto Markets Slip as Fed Holds Rates Steady but Signals Hawkish Outlook Under Kevin Warsh

TL;DR

• Crypto markets fell after the Fed kept rates unchanged but signaled a more hawkish outlook under new chair Kevin Warsh. 

• Bitcoin, Ether, and major altcoins dropped alongside gold and silver as investors reacted to expectations of slower rate cuts. 

Crypto Markets Turn Lower After Fed Rate Decision

Major cryptocurrencies declined on Wednesday after the U.S. Federal Reserve held interest rates steady but delivered a more hawkish economic outlook during its latest policy meeting.

Bitcoin is trading around $64,150, down about 2.2% over the past 24 hours. Ethereum fell 3.6%, according to market data.

Other major tokens also moved lower, with XRP and Solana both slipping roughly 3%. Hyperliquid declined 1.5% to around $72, despite recently reaching a new all-time high.

The broader GMCI 30 index, which tracks the top 30 cryptocurrencies by market capitalization, fell 2.6%, extending its year-to-date decline to nearly 36%.

Safe-haven assets mirrored the downturn in crypto markets. Gold dropped 2.2%, while silver fell more sharply by around 4%.

Analysts said the simultaneous weakness reflected a broader risk-off reaction following the Federal Reserve’s updated projections.

Fed Holds Rates, Signals Slower Path to Cuts

The Federal Open Market Committee voted unanimously to keep its benchmark federal funds rate in a range of 3.5% to 3.75%. The decision was widely expected by markets.

However, policymakers revised inflation forecasts higher and signaled a slower pace of future rate cuts compared with projections made in March.

According to analysts, the updated outlook suggests the Fed remains cautious about persistent inflation pressures despite easing geopolitical tensions and declining energy prices.

Warsh’s First Meeting as Fed Chair Draws Attention

The meeting marked the first policy session chaired by Kevin Warsh, adding further significance to an otherwise expected rate decision.

Market participants closely watched how the new leadership would communicate policy direction.

The Fed’s statement was notably shorter than those issued under former Chair Jerome Powell and removed forward guidance language that previously shaped market expectations.

Warsh described the updated communication style as focusing on presenting “the facts” rather than guiding investor forecasts.

Matt Mena, senior crypto research strategist at 21Shares, said the reaction reflects a market digesting a tighter macro outlook.

“The Fed's decision to hold rates was fully expected, but it carried unusual weight as the first meeting chaired by Kevin Warsh,” he said.

He added that the revised projections indicate policymakers remain concerned about inflation despite recent improvements in energy prices and geopolitical conditions.