The crypto market faced broad selling pressure on May 28 as traders reacted to heightened uncertainty around U.S. interest rate policy .

The global cryptocurrency market cap fell 4.2% to $3.52 trillion, with leading tokens such as Ethereum (-1.2%), XRP (-3.6%), and Solana (-4.1%) leading the decline.

Bitcoin remains above $107,000 , but it dropped 2.4% in the last 24 hours.

No rate cut

The Federal Reserve stated that the risks of both inflation and unemployment are high, and that it remains vigilant, monitoring developments that might exacerbate either risk.

The FOMC chose to hold the fed funds rate steady in the target range of 4.25% to 4.50%, without making any commitments to cuts or rate hikes at this time.

Instead, they stated that their decisions would be data-driven and that they would address any risks that arose going forward.

They also said they would continue the Fed's balance sheet reduction process, which essentially means the Fed will gradually sell off U.S. Treasury and mortgage-backed securities to tighten financial conditions.

Finally, as they always do, the Fed committed to returning inflation to 2%, which is consistent with maintaining substantial employment. Also, it stated that it is prepared to act either way on monetary policy if and when new risks are revealed.

Markets are now re-evaluating their expectations. According to the CME's FedWatch Tool, the probability of a rate cut by the September meeting is now 48.1%, with no change expected for 40.3%.

In the meantime, Kalshi's data anticipated a decline in the forecast for total rate cuts in 2025 from 4 to less than 2 total cuts.

Counting on the Fed's decision also slowing down the rate of balance sheet reduction, traders are now preparing for a prolonged environment of policy tightness, a backdrop likely to restrict near-term upside for crypto.

Markets sink as Fed's decision fuels uncertainty first appeared on TheStreet on May 28, 2025