The Federal Reserve held interest rates steady Wednesday, keeping the federal funds rate at 3.50% to 3.75% in a 9-3 vote. Fed Chair Kevin Warsh used his first post-meeting press conference to tell markets to 'play the ball, not the referee,' signaling a break from the forward-guidance-heavy approach of the Powell era. Bitcoin rose 0.84% to near $64,237, while gold pushed above $4,100.
Three dissents for a hike
Three FOMC members voted for a quarter-point rate increase, the first time in years the committee has seen such a split. Warsh rejected the idea of a flexible inflation target, saying five years of elevated prices meant the Fed couldn't afford to be lenient. 'The trend matters more than any single month,' he said, downplaying the June core CPI print.
No forward guidance, no flexible target
The FOMC statement carried no forward guidance, a deliberate break from the past. Warsh described the weeks ahead as 'watchful thinking' rather than 'watchful waiting.' He said the committee 'will not hesitate to act where necessary and appropriate,' but offered no hint on the next move. President Trump called Warsh 'brilliant' after the decision.
Markets take it in stride
The 10-year Treasury yield eased to 4.620% after touching 4.650% earlier. The SPY turned positive at $742.00, up 0.17%. Gold spot pushed above $4,100, its strongest level of the session. Bitcoin held near $64,237, up 0.84% over 24 hours. For crypto traders, the lack of a hawkish surprise was a relief.
Crypto's take
The three dissents for a hike suggest some officials are worried about inflation, but the majority's decision to hold steady keeps risk assets in a neutral zone. Peter Schiff argued that only the language has changed, not the Fed's actions. With Warsh's 'watchful thinking' now the official posture, the next move remains unclear — but for now, markets are playing the ball.
