Fed Raises Rates by 25 Bps for First Time Since 2023

• BTC-USD

• The Federal Reserve raised rates by 25 basis points to 3.75%–4.00%, its first hike since July 2023.

• The decision was unanimous, with all 12 voting FOMC members supporting the increase.

• New projections show most policymakers expect another 25-basis-point hike in 2026, keeping pressure on Bitcoin and other risk assets.

The Federal Reserve raised interest rates by 25 basis points on Wednesday, delivering its first hike in more than three years as policymakers stepped up efforts to bring persistent inflation back toward target.

The Federal Open Market Committee voted 12-0 to increase the federal funds target range from 3.50%–3.75% to 3.75%–4.00%.

“Inflation remains elevated,” the Fed said, adding that the move would support a “timelier return” to its 2% inflation goal. The central bank also struck a firm tone, saying it “will deliver price stability.”

Fed Signals Another Rate Hike in 2026

The bigger development for financial markets came from the Fed’s updated projections.

Sixteen of 18 policymakers now expect at least one additional 25-basis-point increase before the end of 2026, while only two see rates remaining at their new level. The median projection puts the policy rate at 4.00%–4.25% at the end of 2026 — and still there at the end of 2027.

The Fed also raised its 2026 inflation forecast. PCE inflation is now projected at 3.7%, compared with 3.6% in June, and policymakers do not expect inflation to return to the 2% target until 2029.

At the same time, the central bank raised its 2026 economic growth forecast from 2.2% to 2.3% and lowered its year-end unemployment projection from 4.3% to 4.1%.

What Does the Fed Hike Mean for Bitcoin?

The 25-basis-point increase itself was widely anticipated, with markets assigning a more than 90% probability to the move before the announcement. Bitcoin was trading near $75,580 shortly before the decision.

The more important signal for crypto is the Fed’s indication that tightening may not be finished.

Higher rates can weigh on Bitcoin and other risk assets by increasing yields available on government debt and tightening broader financial conditions. The 10-year Treasury yield briefly topped 5% on Tuesday, reaching its highest level since 2007.

Attention now turns to Fed Chair Kevin Warsh’s press conference and what could trigger the additional rate increase policymakers are projecting.

Source: finance.yahoo.com