Fed Raises Rates to 4% in First Hike Since 2023, 16 of 18 Officials Signal More
September 17, 2026
The Fed’s First Rate Hike in Three Years Lands as Expected
The Federal Reserve raised its benchmark interest rate by a quarter point on Wednesday, lifting the federal funds target range to 3.75% to 4%. It is the central bank’s first rate increase since July 2023, and the vote was unanimous, 12-0, according to the Fed’s statement. Markets had priced the move in for weeks. The bigger news came in the projections released alongside it: 16 of the 18 officials who submitted forecasts expect at least one more quarter-point hike before the end of the year. For crypto, that shifts the question from whether the Fed would hike to how far it intends to go.Warsh Says the Fed Has Only “Removed a Dose of Accommodation”
The Fed’s statement said economic activity is “expanding at a solid pace” and that “inflation remains elevated.” It added that “today’s policy action will support a timelier return to the Committee’s 2 percent goal.” Chair Kevin Warsh went further in his press conference. “I would be hard-pressed to describe broad financial conditions as restrictive,” he said, The Block reported. “So we removed a dose of accommodation.” Rather than calling the hike a one-off correction, Warsh described rates as still loose, leaving the door open to more increases. The preview of this meeting had flagged that the guidance, not the hike itself, would be the signal traders watched.
Bitcoin Whipsaws Between $75,000 and $76,500
Bitcoin traded between roughly $75,000 and $76,500 around the time of the announcement and settled near $75,600, according to The Block. Ether swung between $2,370 and $2,430 before settling near $2,376. By Thursday morning, the BTC price had recovered to around $76,300. Beneath the surface, traders were repositioning rather than fleeing. Cointelegraph reported around $82 million of net selling in Bitcoin perpetual futures and $68 million in Ether perpetuals, offset by about $15.5 million of net spot buying in Bitcoin. “The initial reaction suggests the Fed’s decision was largely anticipated by crypto markets,” Talos analyst Cooper Duschang told Cointelegraph.How to Read the Fed’s Dot Plot
The number driving Thursday’s conversation is not the rate, but the “dot plot,” and beginners can follow it with one idea: each dot is one official’s guess. Four times a year, every Fed policymaker anonymously marks where they expect the benchmark rate to sit at the end of the current year, the following years and over the longer run. Each appears as a dot on a chart, and the median becomes the market’s reference point. The dots are projections, not a plan, and officials revise them as the data changes. Still, when 16 of 18 dots point to a higher rate by December, markets treat it as a strong hint. The projections also show rates staying around 4.1% through the end of 2027, The Block noted, which suggests the Fed sees this as more than a single adjustment.Analysts Draw an Uncomfortable Parallel With 2022
Some analysts see echoes of the last time the Fed began raising rates. In March 2022, Bitcoin was about 40% below its November 2021 peak near $69,000 when the first hike arrived, CoinDesk reported. It rallied roughly 18% over the following 12 days, then fell around 50%. Today, Bitcoin trades about 40% below its October 2025 peak of $126,000. The backdrop differs: core inflation stands at 2.4%, its lowest in five years, even as crude oil holds above $100 a barrel and the 10-year Treasury yield has touched 5%. Bitget analyst Lewis Huang told The Block that Bitcoin absorbed roughly four times the S&P 500’s move on the previous two days of Fed decisions. He flagged the risk that “the Fed is still tightening after the original energy impulse has begun to fade,” which could mean policy remains tight even after the cause of inflation has passed. Broader crypto prices have tended to follow Bitcoin’s lead on those days.Goldman Now Expects Another Hike in October
The forward guidance moved forecasts within hours. Goldman Sachs, which had expected a September hike followed by a pause, now anticipates another quarter-point increase in October, CoinDesk reported on Thursday. Traders using CME’s FedWatch tool priced a little over 50% odds of an October move. Not everyone agrees that more is coming. Block Scholes analyst Andrew Melville told Cointelegraph that a second hike would be a “more hawkish surprise than today’s 25bp hike,” implying that markets have not fully priced it. If the Fed does raise rates again in October, borrowing costs could climb further and pressure on risk assets may build. If inflation data softens as energy prices ease, the committee could pause, which might relieve some of the weight on Bitcoin.A Tightening Cycle Crypto Has Not Faced Since Its Last Bear Market
The quarter point itself was the least important part of Wednesday. What changed is the direction of policy. For three years, the Fed was either cutting or holding, and crypto’s recovery from the 2022 lows unfolded against that backdrop. Now the central bank is tightening, and a large majority of its officials expect to keep going. Bitcoin’s muted reaction shows that markets saw this coming, but a priced-in hike is not the same as a priced-in cycle. The 2022 parallel is imperfect, since spot ETFs and large institutional holders did not exist at this scale then, and the inflation driving this cycle is largely an energy shock that could fade on its own. If the energy impulse fades and the Fed stops after one or two moves, the damage may prove limited. If it does not, the market will be testing whether its new institutional base holds under conditions it has never faced.
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Madiha Riaz
Madiha is a seasoned researcher in cryptocurrency, blockchain, and emerging Web3 technologies. With a background in organic chemistry and a sharp analytical mindset, she brings scientific depth to decentralized innovation. Since discovering crypto in 2017 and investing in 2018, she’s been uncovering and sharing deep insights into how blockchain is redefining the digital asset landscape.
