Fed Holds Rates Steady, Bitcoin Slides on Warsh's Hawkish Tone

The Federal Reserve held its benchmark rate at 3.50%-3.75% on Wednesday, with three members dissenting in favor of a 25 basis point hike.

Bitcoin initially climbed above $64,400 after the decision, but gave back the move when Chair Kevin Warsh opened his press conference by saying 'There is no soft inflation target.' BTC was trading just under $64,000 at press time, up about 1% over 24 hours.

The hold came with an unusual twist: three FOMC members, Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan, dissented in favor of a 25 basis point hike. This was the first time in years markets went into a Fed meeting split on whether the central bank would raise rates.

Warsh told Congress earlier this month he has 'no tolerance' for elevated inflation, and he has criticized the Fed's use of forward guidance and the quarterly dot plot, leaving traders with less visibility into the path ahead of the Sept. 15-16 meeting.