Fed Holds Rates Steady Amid Rising Inflation Concerns

The Federal Reserve has left interest rates unchanged at 3.50-3.75% as inflation concerns mount ahead of its next policy meeting.

Despite a slight reprieve in June's Consumer Price Index reading, which fell 0.4% month-over-month, the Fed's own projections suggest policymakers have little room to move without risking a misstep.

The Personal Consumption Expenditures inflation forecast was revised sharply upward, jumping from 2.7% to 3.6%, indicating that getting inflation back to its 2% target is becoming increasingly difficult.

This environment is unfavorable for risk assets, including Bitcoin and Ethereum, which dropped 2-4% in the aftermath of the June FOMC meeting. Higher rates make fixed-income instruments more attractive, while also strengthening the dollar, historically unfriendly to crypto assets.