- Federal Open Market Committee members voted 12-0 on 16 September to lift the federal funds target range to 3.75%-4.00%, the central bank’s first increase since July 2023.
- Updated projections put the median policy rate at 4.1% at the end of 2026, up from 3.8% in June, pencilling in one more quarter-point hike this year.
- Bitcoin traded near US$76,612 early Thursday UTC, up about 1.1%, while the Fed’s statement flagged uncertainty tied to geopolitical developments.
Federal Reserve policymakers raised the US benchmark interest rate a quarter of a percentage point to a 3.75%-4.00% range on Wednesday.
This is the central bank’s first increase since July 2023, with Chair Kevin Warsh stating the committee’s “predominant focus is on the price stability side of our mandate”.
The Federal Open Market Committee backed the hike 12-0 after leaving the range at 3.50%-3.75% since December 2025. That’s when the committee kept rates steady in June while signalling a hawkish outlook.
The statement described economic activity as “expanding at a solid pace” but said inflation “remains elevated”, adding the action “will support a timelier return” to the committee’s 2% goal.
“The plain fact is that inflation is too high and has been for too long”, Warsh stated at his post-meeting press conference, describing the hike as removing “a dose of accommodation”. He characterised it as “a sober decision, a serious decision, a responsible decision”.
Read more: SEC’s Atkins Urges Clarity Act Vote as 18 State AGs Warn of Weakened Oversight
One More Hike Pencilled In
New projections put the median federal funds rate at 4.1% at the end of 2026, up from 3.8% in the June round, pointing to one further quarter-point increase this year.
The committee’s median forecast has inflation on the personal consumption expenditures measure at 3.7% for 2026, easing to 2.3% in 2027.
Warsh declined to say whether he had a message for US President Donald Trump, who has pressed the central bank for lower rates. “Independence is a two-way street. We let people that do trade policy and fiscal policy stay in their lane, too”, he noted.
At Jackson Hole on 28 August, Warsh had stated he was “committed to a discipline, not to a decision” and that responsibility for “65 months of sustained, elevated inflation sits squarely with the central bank”.
Bitcoin Steady After the Decision
Bitcoin traded at about US$76,612 (AU$107,257) early Thursday UTC, up about 1.1% over 24 hours, according to CoinGecko. Markets had leaned toward a quarter-point September move since strong jobs data pushed out rate-cut hopes earlier this month, extending a year-long debate over how much Fed policy is already priced into Bitcoin.
Crypto analyst Benjamin Cowen posted on X: “Do not blame Kevin Warsh for higher rates. Warsh is not the one who enacted tariffs on basically the entire world and started a war in the Middle East.” The committee’s own statement noted uncertainty “remains elevated owing, in part, to geopolitical developments”.
Related: CryptoQuant Says Bitcoin’s Bullish Setup Faces a Critical $81,700 Test
Federal Reserve#Fed #Hikes #Rates #Putting #Inflation #Front #Center1789626040
