Bitcoin, Ethereum Dip as Fed Holds Rates Steady for Third Straight Time

In brief

• The Federal Reserve held its benchmark interest rate steady for a third time this year as conflict in the Middle East continues to propel energy costs higher.
• The Senate Banking Committee advanced Kevin Warsh’s nomination to lead the U.S. Central Bank, setting him up for a final vote.
• Although Fed Chair Powell’s eight-year tenure is slated to end next month, his succession remains unclear.

The Federal Reserve continued to hold its benchmark interest rate steady on Wednesday, maintaining a cautious stance following the conclusion of what is widely expected to be Jerome Powell’s final FOMC meeting as chair.

The Federal Open Market Committee kept the central bank’s benchmark rate pinned at a target range of 3.5% to 3.75%, marking the third time this year that the group has hit the brakes on policy shifts as conflict in the Middle East threatens the global economy.

"Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook," the Fed said in a statement.

The Fed’s decision on Wednesday was anticipated. Meanwhile, Bitcoin and Ethereum changed hands around $75,100 and $2,240, with both dipping following the announcement to accelerate losses over the past day, according to CoinGecko. Bitcoin is now down 1.4% in the last 24 hours, while Ethereum has fallen 2.3%.

Earlier in the day, the Senate Banking Committee advanced Kevin Warsh’s nomination to succeed Powell, whose eight-year tenure at the Fed’s helm expires next month. The procedural vote sent Warsh’s nomination to the full Senate, where Republicans hold a majority.

Powell has indicated that he would serve as “chair pro tempore” if Warsh isn’t confirmed by May 15, aiming to maintain an orderly transition for the leadership position. Powell has also said that he may continue to serve as a Fed governor to ensure institutional stability.

Last week, the Justice Department ended its criminal investigation into Powell. Sen. Thom Tillis (R-NC) had vowed to block any vote on Warsh’s nomination until investigators closed the case, which Tillis had described as “bogus.”

Recent disclosures showed that Warsh, with a net worth of $100 million, holds many investments tied to the crypto sector, such as and Polymarket. Although he has described many crypto projects as fraudulent and worthless, he has voiced support for Bitcoin.