The U.S. Federal Reserve left the interest rates steady at 5.25%-5.5% Wednesday, as expected, and held its rate cut projection for this year, alleviating market concerns it would adopt a more hawkish stance.

Policymakers on the Federal Open Market Committee (FOMC) forecast they would lower interest rates to 4.6% by the end of 2024, according to the March meeting's economic projection, the same median level as their December outlook, alleviating fears of a more hawkish stance.

Before the FOMC announcement, most market participants had priced the first rate cut for June. Now, the market puts 70% odds for at least one rate cut by June, up from over 60% earlier, according to CME FedWatch Tool data.

The decision followed hotter-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) reports, sparking concerns that inflation might accelerate and forcing the U.S. central bank to keep financial conditions tight and delay rate cuts, potentially weighing on asset prices.

"Tighter monetary policies dampen risk appetite in financial markets while lower rates increase the allure of asset classes such as crypto," digital asset management firm 21Shares noted Wednesday.

Bitcoin {{BTC}} was trading around $64,000 before the meeting from its overnight low of $60,700, then spiked to $64,700 in the immediate aftermath of the decision. The CoinDesk Bitcoin Index (XBX) was up 0.5% over the past 24 hours, while the broad-market CoinDesk 20 Index (CD20) declined over 2% during the same period.