The US Federal Reserve kept interest rates unchanged at 3.5%–3.75%, citing uncertainty around the economic impact of the Iran war and persistent inflation pressures.
Chair Jerome Powell said the economy remains solid overall, with resilient consumer spending and steady business investment, though housing remains weak and the labour market is softening.
The Fed warned that rising energy prices linked to the conflict could push inflation higher, but said it is too early to determine the full economic impact.
“The implications of events in the Middle East for the US economy are uncertain in the near term,”
Powell said.
Markets are now pricing in a 97% chance that rates will remain unchanged at the next Federal Open Market Committee meeting, with only a small probability of a rate hike.
Higher interest rates continue to weigh on risk assets such as cryptocurrencies and equities, as tighter liquidity conditions limit capital flows into speculative markets.
Some analysts, including BitMEX co-founder Arthur Hayes, expect the Fed may eventually cut rates in response to war-related spending pressures, potentially supporting Bitcoin and other digital assets.
Others argue the Fed has entered a gradual liquidity expansion phase, which could lift asset prices over time despite elevated inflation.
The outlook remains uncertain, with investors closely watching inflation data, energy prices and central bank signals for clues on the next policy move.
At the time of reporting, Bitcoin price was $71,333.54.