The Federal Reserve keeps interest rates unchanged! Bitcoin drops below $90,000, gold surges to $5,300, reaching new highs

The latest Federal Reserve meeting decision remains on hold, reflecting that policymakers are choosing to continue a cautious wait-and-see approach to interest rates amid persistent inflation pressures and uncertain economic outlooks.
(Background summary: Fed rate decision tonight: pausing rate cuts has become consensus, but is Powell playing a dovish script?)
(Additional context: Powell admits to being under criminal investigation: it’s because I refused Trump’s request for rate cuts)

Table of Contents

• Steady economic expansion, mixed signals in employment and inflation
• Internal disagreements emerge, a minority of officials advocate for rate cuts
• Bitcoin surges then falls below $90,000
• Gold short-term rally

On January 28, Eastern Time, the Federal Reserve (Fed) released its latest post-FOMC statement. The committee unanimously decided to keep the federal funds rate target range unchanged at 3.5% to 3.75%, indicating that, amid still-high inflation and economic uncertainty, policymakers are continuing a cautious monetary policy stance.

Steady economic expansion, mixed signals in employment and inflation

The FOMC statement notes that multiple indicators show the U.S. economy continues to expand at a “solid pace.” However, employment growth remains relatively subdued, with some signs of stabilization in the unemployment rate, reflecting a gradual cooling of the labor market. On the other hand, inflation levels remain slightly above the desired range, indicating that price pressures have not fully abated.

The Fed reiterates that its long-term goal remains maximum employment and bringing inflation back to 2%. Given the current economic environment, the committee believes that uncertainty about the economic outlook remains high, and thus, it needs to carefully balance risks to employment and prices to avoid over-tightening or premature easing.

Regarding future rate adjustments, the committee states that it will carefully assess upcoming economic data, changes in the overall economic outlook, and risk balance.

Internal disagreements emerge, a minority of officials advocate for rate cuts

It is noteworthy that this decision was not unanimous. Two members (Stephen I. Miran and Christopher J. Waller) voted against the decision to hold rates steady, advocating for a 0.25 percentage point reduction in the federal funds rate target range at this meeting, indicating differing views within the decision-making circle on economic slowdown risks and policy timing.

Overall, the Fed’s choice to hold steady reflects its ongoing data-driven and cautious approach to monetary policy, given that inflation is not yet fully under control but the economy and labor market are gradually cooling.

Bitcoin surges then falls below $90,000

Influenced by the Fed’s latest rate decision, the cryptocurrency market experienced significant volatility. Bitcoin briefly surged to $90,000 before falling back following the statement’s release, currently trading around $89,500. Ethereum followed a similar trend, temporarily around $3,000.

Gold short-term rally

However, gold prices briefly rose after the Fed’s decision, reaching as high as $5,300.