Bitcoin Holds Near $89K as Fed Pauses Rate Cuts

Bitcoin stays near $89k as the Fed holds rates, signaling a calmer inflation path and a pause in rate cuts.

2026-01-29

Bitcoin hovered near $89,000 on Wednesday as the Federal Reserve opted to hold interest rates steady, pausing its rate-cutting cycle and striking a notably calmer tone on inflation and the labor market. The bitcoin price traded above $90,000 earlier in the session before slipping to around $89,500 as Federal Reserve Chair Jerome Powell spoke at his post-meeting press conference. The move came after the Fed announced it would keep its benchmark federal funds rate unchanged at a range of 3.5% to 3.75%, ending a streak of three consecutive 25-basis-point cuts delivered in September, October, and December. The decision reflected a central bank increasingly comfortable with the economy’s trajectory, even as inflation remains above target.

Policymakers cited moderating job growth and lingering price pressures as reasons to pause further easing. The Federal Open Market Committee voted 10–2 to hold rates, with Governors Stephen Miran and Christopher Waller dissenting in favor of another quarter-point cut. Powell reinforced that message, emphasizing that after cutting rates by a cumulative 175 basis points over the past year, the Fed now views policy as close to neutral. For bitcoin traders, Powell’s comments reinforced a familiar narrative: the Fed is no longer aggressively tightening, but it is also in no hurry to deliver further stimulus.

On inflation, Powell pointed to tariffs as a major driver of elevated goods prices, calling them a largely “one-time” effect rather than a source of persistent inflation. Core personal consumption expenditures inflation stands at 2.9% year over year through December, still above the Fed’s 2% target. The expectation is that we will see the effects of tariffs flowing through goods prices peaking and then starting to come down, barring new trade actions. In its statement, the FOMC said the economy continues to expand “at a solid pace,” noting that job gains “have remained low” while unemployment has shown “some signs of stabilization.” Inflation, the committee added, “remains somewhat elevated.”