The Federal Reserve held interest rates steady on Wednesday, a decision that capped a sharp reversal in market expectations that had once favored an early 2026 rate cut.

“Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” said the central bank in its policy statement. “Inflation remains somewhat elevated.”

There were two dissents to the decision to hold policy steady, with recent Trump appointee Stephen Miran and Chris Waller — reportedly in the running to replace Jerome Powell as Fed chair — each preferring to trim the fed funds rate by 25 basis points.

Bitcoin remained just under $89,500 following the expected Fed action, and U.S. stocks were little changed. The U.S. dollar remained sharply higher for the day following yesterday’s large decline, and gold continued higher by 3.7%, near record levels at $5,300 per ounce.

Just two months ago, traders were split on the outlook, with prediction markets pricing a January cut at more than 40%.

By late November, those odds had already begun to fade. Heading into the meeting, the shift was complete. Markets priced in no change at nearly 99%, effectively erasing expectations for near-term easing and cementing the view that the Fed would keep policy restrictive through the first quarter.

While the January decision closes the door on early cuts, it has not eliminated expectations for easing altogether.

Market participants aren’t expecting the Fed to resume rate cuts at its next meeting in March, with CME FedWatch placing the odds at just 16%. Chances are a bit higher in April, rising to about 30%.

“The U.S. Federal Reserve’s decision to hold interest rates reflects persistent inflation concerns and a stabilizing economic backdrop, likely resulting in near-term volatility for crypto markets as liquidity remains supportive,” Nick Ruck, Director of LVRG Research, said in a Telegram message. “If Chair Powell’s press conference conveys a cautious ‘higher-for-longer’ stance or hints at fewer cuts ahead in 2026, we could see short-term pressure on risk assets, including bitcoin.”

Investors will now look to Jerome Powell’s post-meeting press conference at 2:30 pm ET for clues about the central bank’s thinking.