Investors reacted sharply to the Federal Reserve’s latest policy outlook on Wednesday. The Federal Open Market Committee voted unanimously to keep the federal funds rate unchanged in the 3.50%‑3.75% range, as broadly expected. However, the accompanying Summary of Economic Projections (SEP) – commonly called the dot plot – was revised upward, now projecting a federal funds rate of 3.8% at the end of 2026, compared with the 3.4% forecast in the March dot plot. Nine of the eighteen FOMC participants penciled in at least one 25‑basis‑point rate hike this year, and the overall projection shifted from an expectation of at least two rate cuts to a single 25‑basis‑point hike.
At the post‑decision press conference, the newly appointed Fed Chair, Kevin Warsh, announced the formation of task forces to review five core areas of monetary policy: the Fed’s communications strategy (including future press conferences and dot plots), the central bank’s balance‑sheet policies, the reliance on existing data sources, productivity and employment considerations in an AI‑driven economy, and the inflation framework – which will retain the 2% target without revision.
The hawkish tilt immediately dampened risk sentiment across markets. Bitcoin, the world’s largest cryptocurrency, slipped 2.1% to $64,386.8 by 17:37 ET (21:37 GMT). Other major digital assets followed: Ether fell 2.9% to $1,743.72, XRP and Solana each dropped 2.8%, BNB slipped 0.9%, Cardano declined 3.8%, Dogecoin slipped 1.8%, and the meme token $TRUMP was down 0.6%. Spot cryptocurrency exchange‑traded funds continued to experience outflows, marking five consecutive weeks of net withdrawals.
In contrast, Uniswap’s UNI token rallied after Standard Chartered initiated coverage with a bullish outlook. UNI rose to a near‑one‑month high of $3.7290 before easing to $3.30 at the time of writing. Standard Chartered set a $100 price target for UNI by the end of 2030, forecasting $6.50 by the end of 2026 (approximately a 100% increase from current levels), $20 by 2027, and ultimately $100 by 2030, citing the token’s potential to become a larger market‑infrastructure player as tokenized assets gain traction.
Risk sentiment had briefly improved earlier in the day when former President Donald Trump reiterated that a U.S.–Iran peace deal was imminent, suggesting the Strait of Hormuz would reopen. Nonetheless, the Fed’s hawkish guidance outweighed that optimism, prompting a broader sell‑off in risk assets, a rise in the U.S. dollar, and a jump in Treasury yields (the 10‑year yield rose 0.70%). The S&P 500 index slipped 1.21% as the market digested the tighter monetary outlook.