The Federal Reserve is set to announce its first interest rate decision under new Chair Kevin Warsh tomorrow, with markets almost certain that the central bank will keep its policy rate unchanged at around 3.6%. Prediction platforms like Polymarket and Kalshi assign a 99% probability that rates will stay put, effectively removing the headline risk that has kept risk assets on edge for months. Instead, all attention will turn to the post-meeting statement, the quarterly economic projections, and Chair Warsh’s press conference for clues on the future policy path.
The first FOMC meeting chaired by Warsh—nominated by President Trump in late January—comes against a challenging economic backdrop. Inflation has ticked up again, making near-term rate cuts difficult, while the job market recovery has weakened one of the key arguments for easing. The decision text is expected to drop its previous reference to the next move being a cut and adopt more neutral language. Some Fed officials have even hinted that a hike could be on the table, though the immediate consensus is for no change in 2026 and one or two cuts next year.
For crypto markets, the widely expected pause is already priced in, but the tone of Warsh’s remarks could still trigger volatility. If he acknowledges contained inflation risks and avoids hinting at aggressive tightening, markets may interpret that as a step toward easier policy later in the year—a scenario that typically benefits digital assets. The weekend’s U.S.-Iran deal also provides a geopolitical tailwind, giving risk assets breathing room. However, uncertainty remains: a landmark crypto bill faces last-minute pushback from banking interests, and the Fed’s dot plot could inject volatility if it signals a higher-for-longer stance.
Under the surface, on-chain activity and developer engagement across top blockchains like Ethereum and Solana remain consistent, suggesting that core builders are less reactive to short-term rate decisions. The real takeaway for traders will be how Warsh squares the current resilience of the crypto sector with the forward-looking macro picture.
