Fed Holds Rates Steady as Morgan Stanley Deepens Its Crypto Bet With New Ethereum and Solana ETPs
On Wednesday, July 29, the Federal Open Market Committee voted 9–3 to hold the federal funds rate at its current 3.50%–3.75% target range, marking a fifth consecutive meeting without a change. The split vote was notable: three officials — Beth Hammack, Neel Kashkari, and Lorie Logan — dissented in favor of a 25-basis-point hike, an unusually large break from consensus that gave the decision a more hawkish undertone than markets had expected. Heading into the meeting, traders had priced in roughly a one-in-three chance of a hike, and futures positioning ahead of the announcement reached record levels.
Fed Chair Kevin Warsh, running only his second meeting at the helm, offered limited forward guidance, reiterating that inflation remains above the central bank's 2% target while stopping short of committing to a specific path. That restraint has shifted market attention toward the Bureau of Economic Analysis's June PCE inflation report and advance second-quarter GDP data, both released Thursday, as the next signals for whether the Fed leans toward tightening at its September meeting.
Crypto assets took the outcome in stride. Bitcoin pushed toward the $64,400 level in the hours following the announcement, while Ethereum also edged higher, suggesting investors read the hold — rather than a surprise hike — as a modestly favorable outcome given how aggressively a rate increase had been priced in beforehand. Still, with three FOMC members already pushing for tighter policy, analysts note that crypto markets face an unusually uncertain stretch heading into the fall.
That uncertainty hasn't slowed Wall Street's institutional push into digital assets. Just a day before the Fed decision, Morgan Stanley Investment Management launched two new exchange-traded products on NYSE Arca: the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL). Both funds began trading on July 28 and track their respective assets using CoinDesk benchmark settlement rates.
What sets the new products apart is built-in staking. MSSE intends to stake between 50% and 80% of its ether holdings under normal conditions, while MSOL may stake up to 100% of its SOL, with both funds expected to pass through roughly 95% of staking rewards to shareholders. Each trust carries a 0.14% expense ratio — among the lowest base fees offered by any spot ether or Solana product at launch — and Morgan Stanley says it will not retain any share of the staking income for itself. Figment has been selected as the staking provider for both funds.
The launch extends a broader digital-asset expansion for the bank this year, following the debut of the Morgan Stanley Bitcoin Trust (MSBT), which has already surpassed $381 million in assets under management, and the firm's move to bring spot crypto trading to a wider base of E*TRADE users. "The addition of MSSE and MSOL reflects the natural evolution of our product suite, which seeks to provide simplified access to digital assets through the ETP wrapper," said Ally Wallace, Global Head of ETFs at Morgan Stanley Investment Management.
Taken together, the two stories point to a familiar dynamic in the current cycle: monetary policy uncertainty setting the short-term mood for crypto prices, while institutional infrastructure — regulated, staking-enabled, and increasingly low-cost — continues to expand the on-ramps for mainstream investors regardless of which way the Fed leans next.
