Fed Holds Rates at 3.5%-3.75% as 8-4 Vote Sends 30-Year Yield to 5%

The Federal Open Market Committee voted 8-4 on Wednesday to keep the federal funds rate at 3.5%-3.75%, extending its pause on rate adjustments for a third consecutive meeting, in what the Unchained Podcast described as “the most divided policy decision in more than 30 years.”

The same source said the hawkish dissents pushed the 30-year U.S. Treasury yield to 5% early Wednesday, “its highest level since July 2025,” and noted that the yield level had been reached only twice in the past two decades.

@coindesk

In the hours after the announcement, Bitcoin fell from roughly $76,200 to briefly below $75,000 before partially recovering, while Ether, Solana, and XRP extended earlier losses to multi-week lows, according to the Unchained Podcast.

CoinDesk similarly tied the move to “hawkish dissent within the Federal Reserve” and said the 30-year U.S. Treasury note rose to 5% early Wednesday, “hitting the highest since July 2025.”

CoinDesk also reported that as of writing BTC traded at $75,670, down 2% over 24 hours, and that the Dollar Index (DXY) hovered above 99, looking to extend Wednesday’s 0.5% gain.

The Fed’s post-meeting statement, as quoted in the Unchained Podcast, said inflation remains “somewhat elevated” and that “developments in the Middle East are adding a high level of uncertainty to the outlook,” while citing “rising global energy prices” as a factor keeping inflation sticky.

The split inside the Fed became central to how markets interpreted the decision, with the Unchained Podcast naming Stephen Miran as the dissenter who argued for “an immediate quarter-point cut” and describing that Beth Hammack, Neel Kashkari, and Lorie Logan voted with the majority but opposed any language implying an easing bias.

CoinDesk framed the same internal disagreement as a “bucket of ice on the market’s pivot party,” quoting Matt Mena saying, “The Fed's decision to keep rates steady wasn't the shocker, but those three dissenters calling for a strike on any easing guidance threw a bucket of ice on the market's pivot party.”

Allnews

CoinDesk also quoted Diana Pires of sFOX saying, “As long as yields remain attractive and [Fed's monetary policy] stays tight, capital has a real alternative to risk. This continues to pressure assets like crypto, depending on liquidity and momentum,” and it connected the pressure to the 30-year yield’s move to 5%.

The Unchained Podcast added that the 30-year government bond offering at that return created a “near-risk-free alternative to bitcoin and other non-yielding assets,” and said rising yields historically corresponded with capital rotating away from crypto.

CoinDesk described the mechanism in more direct terms, saying, “A 30-year Treasury yielding 5% is an almost risk-free return,” and that “every dollar sitting in bitcoin is a dollar not earning that 5% yield.”

It also reported that gold fell “over 1% to a one-month low of around $4,540,” and that Vikram Subburaj, CEO of Giottus, said “Rising Treasury yields and a stronger dollar [have] historically pressured crypto valuations by tightening financial conditions.”

The sources also tied the rate decision to a leadership transition at the Fed, with the Unchained Podcast noting that Wednesday “marked one of Jerome Powell’s final meetings as Fed chair.”

During the post-meeting press conference, Powell confirmed he plans to remain as a governor after his chairmanship ends in mid-May, and the Unchained Podcast said the Senate Banking Committee advanced Kevin Warsh’s nomination to succeed Powell by a 13-11 party-line vote the same day.

CoinDesk similarly described Warsh as “Donald Trump's pick to replace outgoing Chairman Jerome Powell,” and it said ING characterized the hawkish dissent by three officials as a warning shot aimed at Warsh.

CoinDesk quoted ING analysts saying, “They perhaps want to make it clear that they will not be easily swayed to his way of thinking that rates in time can be lowered,” and it added that the policy statement contained “no clear bias toward easing.”

The Unchained Podcast reported that markets had been watching the leadership transition closely, with Warsh “widely viewed as more open to easing than Powell.”

In parallel, Allnews framed the broader rise in bond yields as reflecting concerns about U.S. President Donald Trump’s economic policies and cited a jump in the ten-year U.S. Treasury note yield to 4.6% and a 30-year Treasuries rate that “briefly surpass[ed] 5%.”

Beyond the Fed, the sources laid out multiple drivers for rising long-term yields, including oil-driven inflation expectations, fiscal projections, and shifting demand for sovereign debt.

CoinDesk said “Oil rally is lifting inflation expectations,” reporting that early Thursday oil prices surged to their highest since 2022, with Brent briefly topping $125 per barrel, after Trump mulled extending the blockade of Iranian ports, and it added that oil prices had been elevated “hovering largely between $80 to $120 since the Iran war began in late February.”

Le Temps

The Unchained Podcast likewise said the Fed cited “rising global energy prices” as a factor keeping inflation sticky, and it described the Middle East as adding “a high level of uncertainty to the outlook.”

Allnews attributed the worldwide rise in sovereign yields to “growing concerns over the economic policies of U.S. President Donald Trump” and “increasingly uncertain global outlooks,” while also listing “erosion of long-term government credibility” and “worsening national and international political uncertainty.”

It tied U.S. fiscal concerns to projected deficits, stating the Congressional Budget Office projects deficits of $1.9 trillion for 2024–2025, and it said the annual federal deficit already exceeds 6% of GDP and is expected to remain high through 2035.

Morningstar Canada added a supply-and-demand framing, saying an “supply effect” comes from higher sovereign debt issuance by governments to fund deficits while some natural buyers “are withdrawing or far less active,” and it described how central banks’ intervention from late 2008 created a “huge demand shock” that lowered the term premium, with that intervention reversing since 2022.

Le Temps framed the stakes for Donald Trump in terms of interest rates acting as a “Sword of Damocles,” linking Trump’s threats at Davos to the possibility that European countries could sell American financial assets in response to tariffs.

The article said Trump threatened to “severely retaliate” at the Davos World Economic Forum and asked, “Retaliate against what?”

PGurus

It answered that European countries hold about 40% of the US public debt in foreign hands—over $3.6 trillion—and could push up long-term U.S. interest rates, “in addition to a loss of value of the dollar.”

Le Temps emphasized that long-term rates are the indicator most watched by the American president, and it quantified the debt burden by saying the U.S. has a debt of $38.4 trillion and that “any rise in interest rates increases the cost of financing, already colossal.”

It quoted Valentin Bissat, Chief Economist at Mirabaud AM, saying, “Debt held by the public represents around 100% of GDP and is expected to reach 120% in 2035,” and that “Its cost is expected to fluctuate between $1,000 and $1,200 billion for 2026, i.e. 3.3% of GDP, then rise again.”

The same source added a daily rate of increase, stating, “This debt increases by about $6 billion per day, or $71,750 per second.”