Fed Hints at Another Rate Hike, Bitcoin Moves Right Away
The minutes suggest the Fed still sees room for another move, while Bitcoin was the only asset to react right away. The market is also watching the impact on crypto funds and risk assets.
Key Takeaways
- The Fed minutes show that most policymakers think another rate hike this year is likely.
- Bitcoin reacted right away to the release and rose slightly, while U.S. stocks and gold stayed almost unchanged.
- The market had already priced in more tightening; weaker labor market data and AI spending also remain relevant for the Fed.
The Federal Reserve minutes showed that most policymakers still think another rate hike this year is likely. Bitcoin reacted right away to the release, while U.S. stocks and gold stayed almost flat. These were minutes from the meeting in which the Fed had already raised rates by 0.25 percentage points to 3.75% to 4.00%, the first hike since 2023.
What the Fed Said
According to the minutes, “most” participants thought another hike in 2026 would likely be appropriate. “Some” policymakers saw the risks to inflation shifting further toward a scenario where prices rise faster than expected. Several participants also said the current rate is not restrictive, or only slightly restrictive, which means borrowing still is not slowing things down enough in their view.
The minutes also showed that the scale of AI buildout, with heavy spending on data centers and chips, continues to surprise the Fed. That is not a new rate decision, but it is another sign that the central bank is still watching the economy and inflation closely.
Why Markets Stayed Calm
The reaction in stocks and gold was limited because there was not much truly new in the document. The S&P 500 was around 7,801 in the first minutes after the release, down 0.02%. Gold stayed around $4,110 (€3,680) per ounce, after briefly trading near $4,125 (€3,690) earlier that afternoon.
The market had also already priced in another Fed move. In the earlier projections from September 16, the median policymaker was already looking for another quarter-point increase by the end of the year. After that, weaker labor market data also came in, with about 29,000 new jobs in September and unemployment at 4.2%.
Why Bitcoin Moved
Bitcoin rose from about $83,159 (€74,400) to $83,306 (€74,500) in the first five minutes after the release. That was a small move, but it was still the clearest reaction of the three markets. Before that, the price had already fallen from around $83,600 (€74,800) to about $83,050 (€74,300), which made the reaction to the minutes stand out even more.
For crypto traders, the big thing is that Bitcoin trades 24/7. That means the coin can move before a Fed decision, while stocks and gold only react once the market opens or the news gets digested. After the previous rate hike, $3.55 billion flowed into crypto funds, which shows that rate expectations still feed directly into the crypto market. That fits with the picture that crypto funds pulled in a lot of money after a Fed hike, despite higher rates.
