Crypto markets wobble after hawkish Fed outlook in Kevin Warsh's first FOMC meeting
Major cryptocurrencies edged lower on Wednesday after the Federal Reserve held interest rates steady but released hawkish economic projections in Kevin Warsh's first meeting as chair.
The GMCI 30, which tracks the top 30 largest cryptocurrencies by market cap, was down about 2.6%, bringing its year-to-date drop to nearly 36%.
Traditional safe-haven assets also weakened following the decision, with gold falling by 2.2% and silver dropping by an even more dramatic 4%.
"Taken together, the picture is one of a crypto market absorbing a hawkish macro backdrop while rotation and genuine demand continue to surface in the strongest names," said Matt Mena, senior crypto research strategist at 21Shares.
Warsh's debut
The Federal Open Market Committee voted 12-0 to maintain its target federal funds rate at 3.5% to 3.75%, an expected decision that was mostly priced in leading up to the meeting. However, policymakers raised their inflation forecasts and projected a slower path toward lower rates than they projected earlier in March.
"The Fed's decision to hold rates was fully expected, but it carried unusual weight as the first meeting chaired by Kevin Warsh," Mena said.
"The real signal came from the updated projections," he added, noting that the revised forecasts suggest policymakers remain concerned about inflation pressures despite easing geopolitical tensions and a recent decline in energy prices.
Wednesday's meeting also offered the first glimpse of how Warsh intends to communicate Fed policy. Its statement was substantially shorter than those issued under former Chair Jerome Powell and completely omitted the forward-guidance language that Powell used throughout his tenure.
Warsh described the format as focused on presenting "the facts" rather than guiding market expectations.
