Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Key Points:

• The Fed keeps rates unchanged.
• The Fed still expects 1 rate cut in 2026.
• Only one dissent for a cut, Governor Miran.
• Fed says Middle East developments are uncertain.
• The Fed has lifted its growth outlook.
• Fed lifts 2026 projection for Core inflation, but 2027 is left unchanged.
• Powell and the Fed tended to steer away from the potential inflationary impacts of the conflict in the Middle East.
• Powell will remain in his role until the investigation is concluded and when a new Chair is confirmed. He also refused to declare whether he’ll stay on as a Governor or not.

What This Means?

This was a surprisingly dovish outcome as there is still a bias to cut from most officials, despite an increase in the inflation outlook in the near-term. Powell stated in his press conference that energy supply shocks should be looked through, however this will be dependent on whether higher inflation creeps into inflation expectations. Should the conflict in the Middle East be more prolonged, then it's likely that inflation expectations will increase and that'll push Fed cuts further out again.

An interesting point was that Governor Waller didn't dissent from a rate cut. Recently, Waller made the point that if he sees a weaker labour market print, that would steer him towards an increased rate-cutting bias. That has happened, but still today, he hasn't dissented. Maybe this suggests that he's weighing the potential increase to inflation in the near-term (due to higher oil prices) over the weakening job market. This is notable, and maybe the biggest signal that today's meeting shouldn't be read as a 'dovish hold' by the Fed.

Ultimately, the Fed is still predicting one rate cut for 2026 - it will however, be dependent on the conflict in the Middle East resolving soon and the price of oil coming back down in the coming weeks. If it wasn't obvious already, the Fed will be on hold for the foreseeable future - at least the next few meetings. It's now highly likely that the Fed is done cutting rates under the leadership of Chair Powell. He will likely be replaced in mid-June 2026.

Market Reaction:

The market's initial reaction was dovish - risk assets getting a small move higher. However, this has mostly been sold into, and we expect this to continue.

Even though today's meeting was about as dovish as a bull could have hoped for, we still don't expect the market to react positively to it.

Our View?

Bitcoin moved into just shy of $76k yesterday (Tuesday, 17th March), and it is currently trading in the $71ks following today's hotter-than-expected PPI data and today's Fed meeting.

Whilst it's possible that Bitcoin retests $74k in the immediate term (over the coming days/week), it is our view now that Bitcoin has locally topped at $76k on Tuesday, 17th March.

Our Base Case is for Bitcoin to revisit the mid-$60ks in the coming weeks, and for the price to reach the $50k-$63k zone in Q2 2026. From a framework perspective, the $50k-$60k zone remains where our cost basis models and on-chain data suggest deep value historically. We are not active at current levels and continue to wait for the data to shift.

Cryptonary’s Take:

This Fed meeting was surprisingly dovish given the likely upcoming inflation risk due to the conflict in the Middle East. And despite the initial dovish reaction from markets upon the initial statement, risk assets have sold off during the Powell press conference. We expect bearish price action to continue over the coming weeks.

Our base case is for Bitcoin to visit $50k-$63k in Q2 2026.