The US Federal Reserve kept interest rates unchanged Wednesday January 28maintaining the federal funds rate target 3.50%–3.75%after policymakers showed continued caution amid high inflation and an uncertain economic outlook.
In its first interest rate decision from 2026, the Federal Open Market Committee said economic activity continues to grow at a strong pace. Job growth has remained low and unemployment is showing signs of stabilizing.
However, inflation remains “somewhat high,” reinforcing the Fed’s data-dependent stance.
The policy remains restrictive and there is no signal about the timing of the cuts
The Committee repeated his commitment to bring inflation back to its own level 2% target. It would continue to assess incoming data when considering the “magnitude and timing” of any future policy adjustments.
Officials did not provide guidance on when rate cuts might begin, nor did they express concern about current financial conditions.
The statement emphasized that uncertainty about the economic outlook remains high, with the Fed ready to adjust its policy if risks emerge that could challenge its dual mandate of maximum employment and price stability.
Crypto markets show a muted initial reaction
Major crypto assets showed limited immediate reactions following the decision, with traders appearing to await further clarity from Chairman Jerome Powell’s press conference later in the day.
Bitcoin traded around $89,000largely flat through the session and remaining below short-term moving averages after weeks of choppy price action.
Since the November pullback, the asset has struggled to regain upward momentum, with recent sessions characterized by consolidation rather than directional conviction.
Ethereum followed a similar pattern and hovered close $3,000 and is also trading below the 20 and 50 day moving averages. Like Bitcoin, ETH’s price action signals caution rather than a decisive response to the policy announcement.
The markets are waiting for Powell for directional signals
The lack of immediate change in crypto mirrors the behavior seen in traditional markets during recent Fed meetings, where initial reactions to the policy statement prior to the press conference have often been muted.
Investors will be watching Powell’s comments for any nuances about the progress of inflation, labor market conditions or financial stability that could influence expectations for interest rate developments in the coming months.
Until then, the Fed’s decision keeps monetary conditions restrictive and liquidity expectations largely unchanged.
Final thoughts
- The Fed kept interest rates at 3.50%–3.75%, maintaining a cautious, data-driven stance amid high inflation.
- Bitcoin and Ethereum traded flat after the announcement as markets waited for further signals from Powell’s press conference.