Bitcoin Maintains Stability Around $90,000 as Federal Reserve Halts Rate Reductions and Powell Adopts Neutral Outlook
On Wednesday, Bitcoin’s value lingered close to $89,000 following the Federal Reserve’s decision to pause its cycle of interest rate cuts. The Fed conveyed a more composed perspective on inflation and employment conditions.
Earlier in the day, Bitcoin briefly surpassed $90,000 before retreating to approximately $89,500 during Chair Jerome Powell’s press briefing after the meeting.
The Federal Reserve announced it would keep its benchmark federal funds rate steady within a 3.5% to 3.75% range. This move ended three consecutive quarter-point reductions made in September, October, and December.
This choice reflected growing confidence from policymakers regarding economic progress despite inflation still exceeding targets. Officials pointed out slowing job growth alongside persistent price pressures as reasons for halting further easing measures.
The Federal Open Market Committee (FOMC) voted 10–2 in favor of maintaining rates; Governors Stephen Miran and Christopher Waller dissented by advocating another 0.25% cut.
Miran—whose term concludes this Saturday—has consistently supported deeper reductions while Waller is considered a potential successor to Powell as Fed chair; he last opposed holding rates steady back in July.
BREAKING:
Treasury Secretary Scott Bessent reveals President Trump might appoint a new Fed Chair 'within about a week'.
Pro-Bitcoin Rick Reider currently leads with a 10% advantage for the position — Polymarket pic.twitter.com/8IjKqoaYpe
— Bitcoin Magazine (@BitcoinMagazine) January 28, 2026
Powell Highlights Robust Economic Growth Amid Mixed Signals
The FOMC statement emphasized that economic expansion remains strong while acknowledging that job creation has slowed down somewhat and unemployment shows signs of leveling off. Inflation was described as still elevated but manageable.
Chairman Powell reiterated these points by noting that after reducing rates by an aggregate of 175 basis points over the past year, monetary policy now approaches neutrality.
“Looking at recent data makes it difficult to claim policy is highly restrictive right now,” Powell explained. He characterized current conditions as either loosely neutral or slightly restrictive depending on interpretation.”
This nuanced stance influenced market behavior: although Bitcoin tends to rally when financial conditions ease broadly speaking, Wednesday’s trading suggested investors were adjusting expectations for future rate moves rather than reacting strongly against hawkish signals.”
Regarding labor markets specifically, Powell dismissed concerns about rapid deterioration citing payroll reports indicating average monthly losses near only 22 thousand jobs while private sector hiring remained modestly positive.”
The slower increase in labor supply was attributed primarily to reduced immigration levels and lower participation rather than diminished demand overall.”
Tariffs Seen As Temporary Inflation Driver
On inflation causes beyond wages or demand pressures, Powell identified tariffs —a key factor behind rising goods prices—as largely one-off effects instead of ongoing contributors.
Core personal consumption expenditures inflation stood at an annualized rate of 2.9%, surpassing the Fed’s target level of 2%.
“We expect tariff impacts on goods prices will peak soon then begin declining,” Powel stated barring additional trade restrictions.
A Balanced Approach Supports Bitcoin Stability While Limiting Short-Term Gains
For cryptocurrency traders, Powel’s remarks reinforced familiar themes: The central bank has ceased aggressive tightening yet remains cautious about initiating fresh stimulus efforts.
This middle-ground approach helped bitcoin sustain recent gains but tempered immediate upside fueled by hopes for swift interest-rate cuts.
The Question Of Future Leadership At The Fed
The issue surrounding who will succeed Jerome Powel also took center stage during discussions.
When asked what guidance he would offer his eventual replacement, Powel responded with three key pieces advice: Avoid political entanglements, Sustain engagement with Congress, and respect institutional staff members.
“Stay clear from elected politics — don’t do it,” he warned emphasizing how crucial independence remains amid increased scrutiny including ongoing Supreme Court litigation involving the central bank.
Waller’s dissent combined with Miran leaving office have sparked speculation around upcoming leadership changes impacting monetary policies—a dynamic closely monitored by crypto markets sensitive toward shifts in fiscal philosophy.
Treasury Secretary Scott Bessent indicated via Yahoo Finance that President Trump could announce his nominee within one or two weeks.
According to Polymarket betting odds show Rick Rieder leading at roughly thirty-seven percent chance followed by Kevin Warsh near twenty-eight percent with Christopher Waller trailing third around fifteen percent probability.
This article titled “Bitcoin Maintains Stability Around $90K As Federal Reserve Halts Rate Cuts And Adopts Neutral Stance” originally appeared on Bitcoin Magazine authored by Micah Zimmerman.