The Federal Reserve maintains interest rates, Bitcoin is pressured near $70,000, and the Iran conflict escalation increases market uncertainty.

Gate News: On March 19, the Federal Reserve kept the benchmark interest rate unchanged at 3.50% to 3.75%, meeting market expectations. The voting result was 11 to 1, with the sole dissenting vote from Stephen Milan, who supported a 25 basis point rate cut. The Fed cited uncertainties stemming from the US-Iran conflict and recent oil price surges to nearly $100 per barrel as key factors in this decision.

Federal Reserve Chair Jerome Powell stated that the short-term impact of the Middle East situation on the US economy remains unclear. Rising energy prices could push up overall inflation, but the duration and extent are still uncertain. He emphasized that US economic activity is steadily expanding, consumer spending remains strong, and business investment is growing, though signs of weakness are appearing in the housing and labor markets. The Fed raised its inflation outlook for 2026 to 2.7% and expects it to fall back to 2.2% in 2027.

Market reactions to the Fed decision were notable. Bitcoin’s trading price dropped to around $70,000, down 5.13% for the day, while the Nasdaq and S&P 500 indices both declined by 0.55%. The yield on the 10-year US Treasury rose slightly to 4.21%. In a high-interest-rate environment, funds typically flow into safer assets, whereas low rates support risk assets like Bitcoin, Ethereum, and stocks. The Fed’s “dot plot” indicates an expectation of one 25 basis point rate cut in 2026 and another in 2027.

Analyst opinions show cautious market sentiment. Arthur Hayes said he prefers to wait until after the Fed cuts rates before increasing Bitcoin holdings and believes the Iran conflict might lead to monetary easing to support military spending. Macro economist Lyn Alden pointed out that the Fed has entered a “gradual money printing” phase, slowly pushing up asset prices.

Overall, the Fed faces pressure balancing its dual goals of price stability and maximum employment. Powell emphasized that the Fed will continue to monitor developments in the Middle East to decide whether further monetary policy actions are necessary.