The Fed held rates at 3.5–3.75% today for the second straight meeting, and the press conference was more revealing than the decision itself.
Powell's sequencing argument is the thing I keep coming back to. He made clear the Fed won't even consider looking through energy-driven inflation — the Iran war oil shock — until tariff inflation in goods has already worked its way through. That's a layered condition. Tariff effects first. Oil effects second. Then maybe a conversation about cuts. Core inflation meanwhile was revised upward to 2.7% for year-end, from 2.5% in December. Brent touched $109 intraday. Nationwide gas average up 92 cents in a month to $3.84.
Markets came in expecting two cuts this year. They're now pricing essentially one at best, with real probability of zero. The dot plot shows seven of nineteen FOMC officials see rates on hold through all of 2026 — one more than December. That's not a small shift inside a consensus document.
What's interesting for crypto specifically is that this removes a key narrative catalyst. The rate cut trade — risk-on flows, dollar softening, $BTC acting as macro hedge — needs actual easing or credible near-term expectation of it. Right now neither exists. $BTC sold off. So did equities. The 10-year yield barely moved. Markets aren't panicking, but they're not rotating either.
Wait-and-see doesn't usually produce strong upside in risk assets.