Fed Raises Rates to 4% and Puts Bitcoin Under Pressure
The dot plot stays hawkish: 16 of the 18 Fed policymakers expect one more rate hike this year. Bitcoin briefly jumped, but then gave back those gains.
Key Takeaways
- The Federal Reserve raised rates by 0.25 percentage points to 3.75% to 4.00%.
- Bitcoin rose briefly after the rate decision, but then fell back to around $76,152.
- Sixteen of the eighteen policymakers expect at least one more rate hike this year.
The Federal Reserve raised rates by a quarter percentage point to 3.75% to 4.00%. For crypto, the standout move was that Bitcoin briefly climbed right after the decision, but then slipped back again. At the same time, the new rate forecast showed that 16 of the 18 policymakers still expect at least one hike before the end of the year.
Fed Turns More Hawkish Again
This is the first rate hike since 2023, and all 12 voting members backed the move. That puts the Fed on a clearly tighter policy path, even though inflation is still above target. In the statement, the earlier reference to inflation caused by supply shocks in sectors like energy was also removed.
The central bank now said the hike should help bring about a more timely return to the 2% target. The closing line also stayed in place, saying the committee will deliver price stability. In addition, policymakers raised their estimate for business investment and replaced a reference to the conflict in the Middle East with broader geopolitical developments.
What the Dot Plot Shows
The so-called dot plot, where 18 policymakers show where they see rates going, turned clearly hawkish. The Fed now expects core inflation based on the Personal Consumption Expenditures index to come in at 3.4% in December 2026, and 2.5% a year later. The unemployment forecast was lowered to 4.1% for both years, down from 4.3% before.
That fits into a period where inflation remains stubborn. According to the context provided, it stood at 3.4% in August 2026, partly because of higher energy prices and ongoing geopolitical tensions. For European crypto readers, that matters because U.S. rate expectations often quickly spill over into the crypto market and into demand for riskier investment products. The weakening link between Bitcoin and the dollar also shows that traders sometimes react mainly to policy and liquidity right before a Fed decision.
Bitcoin Reacts Right Away
Bitcoin traded around $76,152 (€66,000) after the decision, down 0.7% over 24 hours. In the minutes after the announcement, the price first moved up from about $75,350 (€65,300) to above $76,100 (€66,000). After that, the coin gave back part of those gains.
XRP was also under pressure in a week that had already started weak for crypto. The coin fell along with Bitcoin after the CLARITY Act stalled in the Senate, a bill that was supposed to make it clearer which U.S. regulator has oversight over digital assets. According to the source, more than $300 million (€260 million) in leveraged positions were wiped out in the process. Gold moved the other way and first climbed to around $4,368 (€3,790), before slipping back to around $4,333 (€3,760).
