The Fed returns to monetary tightening after more than three years without an increase. Indeed, the US central bank raised its rates by 25 basis points, bringing their range to 3.75% – 4.00%,
The Fed returns to monetary tightening after more than three years without an increase. Indeed, the US central bank raised its rates by 25 basis points, bringing their range to 3.75% – 4.00%, a first since July 2023. This decision is motivated by persistently high inflation, yet it did not automatically shake bitcoin. Despite a spike in volatility after the announcement, BTC stabilizes around 76200 dollars. Between monetary tightening and crypto market resistance, the Fed’s decision now raises the question of the trajectory of rates.
The Federal Open Market Committee approved a 25 basis point hike, setting the new Fed Funds range between 3.75% and 4.00%. It was a unanimous vote of the governors. Moreover, this move was already fully anticipated by the market. The Federal Reserve had not raised rates since July 2023. Thus, the decision ends more than three years without an increase and marks the return of tightening in United States monetary policy.
Your 1st cryptos with BitMartThis link uses an affiliate program.The Fed bases its choice on an economy that still retains vigor. The FOMC indicates :
Economic activity is progressing at a solid pace.
However, monetary officials acknowledge persistently high uncertainty, mainly related to geopolitical developments, but note that domestic spending has remained resilient. Such a combination provides the Fed with room to act on prices without presenting its intervention as a response to a sudden slowdown in activity.
The FOMC’s decision can thus be reduced to three main data points :
The assessment regarding prices immediately justifies this change of course. Thus, the FOMC notes the following: “inflation remains high”. The central bank links its rate hike to its price stability goal. According to its statement, the decision taken this Wednesday is to favor “a quicker return to the Committee’s 2% target”. The message ends with an explicit commitment: “the Committee will ensure price stability”.
From there, individual forecasts from Fed officials specify an additional hike in 2026. This projection highlights that monetary officials do not necessarily view the 25 basis point move as a standalone intervention. The question therefore concerns the duration of this new phase and the indications the Fed will provide regarding its evolution.
At first, this announcement triggers volatility in the crypto market without causing a major directional move. Bitcoin is currently trading around 76200 dollars, showing a slight rebound. Also, traditional markets react moderately. US stocks remain modestly in the green, while bond yields have slightly declined. This absence of automatic disruption occurs while the 25 basis point increase was very widely anticipated.
Nevertheless, bitcoin’s reaction a few minutes after the announcement does not yet represent a measure of its longer-term effects. The Federal Reserve has just resumed rate hikes while noting that a new increase remains possible in 2026. Having anticipated the current decision, the market must now evaluate the accompanying trajectory.
Bitcoin’s initial resistance merely shows that the announcement did not cause an immediate breakdown. Between inflation still above the 2% target, a solid economy and the prospect of further tightening, investors now have a new monetary framework to incorporate.
