Donald Trump signed the peace Memorandum of Understanding (MoU) between the United States and Iran, which marks a historic geopolitical milestone. However, Bitcoin hasn't bounced back from the shock of the hawkish message from the Federal Reserve (Fed). BTC is currently priced at $64,339, down 2.10% in the last 24 hours.
Here's what the MoU entails, what the Fed actually said, and why the crypto markets are still feeling the pressure from broader macroeconomic forces.
🚨 President Donald J. Trump has SIGNED the Iran Memorandum of Understanding at Versailles in France. 🇺🇸 pic.twitter.com/JQ6qlbvFAF
— The White House (@WhiteHouse) June 17, 2026
What Trump's U.S.-Iran peace MoU brings to the markets
The U.S.-Iran peace MoU is a 14-point diplomatic agreement aimed at ending ongoing hostilities and stabilizing the entire region. The agreement includes monitoring mechanisms, partial sanctions relief, and a timetable for technical negotiations on Iran's nuclear program.
The MoU was facilitated by Pakistan with strong support from Qatar, Saudi Arabia, and Turkey. Trump described it as a victory for his diplomacy and presented it as his signature 'Art of the Deal' approach.
🚨🇮🇷 BREAKING: A new photo reportedly shows Iranian President Masoud Pezeshkian signing the 'Islamabad Memorandum of Understanding' from his office earlier today. Tehran's signature is now on the record. The deal ending the war is locked in on both sides. Source:… https://t.co/GmdzQrawsL pic.twitter.com/tLayVfylu1
— Mario Nawfal (@MarioNawfal) June 18, 2026
Bitcoin initially rose to $66,315 on the news, as geopolitical relief increased risk appetite. Oil and gold, on the other hand, quickly dropped as the geopolitical premium vanished from international financial markets.
The mood didn't stay positive for long. Bitcoin took a sharp dive after the Fed's decision, overshadowing the entire geopolitical narrative. Now, BTC is closer to its seven-day low of $61,464 than its latest weekly high.
U.S. Federal Reserve Chair Kevin Warsh made his first FOMC decision on June 17. The Fed kept the target rates steady at 3.50%–3.75% for the fourth consecutive meeting. However, previous references to new rate adjustments were removed from the statement.
Shifting to a neutral, fully data-driven stance surprised the markets. Additionally, 9 of the FOMC's 18 participants now forecast at least one rate hike for 2026. This is a big change from previous forecasts that emphasized cuts or prolonged rate holds.
I am watching the market today, and everyone is completely overreacting to the June 17th Fed meeting. Retail sees that new Fed Chair Kevin Warsh held rates steady at 3.75% and watches Bitcoin dip on the news, assuming the hawkish tone is bearish for crypto. They…
— Brett Kessler (@BrettKessler__) June 17, 2026
The hawkish tone reinforced Citadel Securities' warnings about the rising risks of a rate hike in September. Strong wages, resilient demand, supply constraints, and AI investments keep inflation firmly at 4.2% per year, well above the Fed's 2% target.
The markets reacted quickly to the news. The S&P 500 dropped 1.5%, Nasdaq fell 2%, and Dow lost 160 points. Treasury yields rose, with the 2-year rate up 11 basis points to 4.153%, and the 10-year rate up 12 basis points to 4.469%.
🚨MASSIVE STOCK SELL-OFF JUST 2 HOURS AFTER FOMC The S&P 500 has erased $1.2 TRILLION in market cap, falling 1.5%, while the Nasdaq sinks 2% as markets price in additional Fed tightening. pic.twitter.com/uuKfUGl5vT
— Coin Bureau (@coinbureau) June 17, 2026
Bitcoin moved in line with overall risk aversion. The cryptocurrency couldn't digest the hawkish message, even though the U.S.-Iran deal supported geopolitical sentiment. BTC's price is now 4.10% below the weekly high of $67,203, according to CoinGecko.
First day as pro Crypto Fed chair. https://t.co/kOAJimDkgI pic.twitter.com/kwpNXoMtRh
— Ash Crypto (@AshCrypto) June 17, 2026
This whole situation highlights an important lesson for crypto investors. Geopolitical successes can temporarily boost sentiment, but monetary policy decisions still dominate Bitcoin and risky asset outlooks in the medium term across all asset classes.