The U.S. Federal Reserve decided at its September 16 Federal Open Market Committee meeting to raise the policy rate by 0.25 percentage points to 3.75–4.00%. The hike is the first in about three years, since July 2023, and the vote was unanimous at 12-0. Fed Chair Warsh said at a press conference that 'the plain fact is that inflation is too high, and it has stayed that way for too long,' explaining that the rate increase is a step to return inflation to the 2% target more quickly. In the latest economic projections, the median forecast for real GDP growth is 2.3% in 2026 and 2.4% in 2027, while the unemployment rate is expected to hold steady at 4.1% from 2026 through 2029. In the dot plot, 16 of the 18 FOMC participants expect at least one more rate hike during 2026, and the median policy rate came to 4.1% at the end of 2026, 4.1% at the end of 2027, and 3.9% at the end of 2028. Bitcoin swung sharply between 75,000 and 76,500 dollars during the press conference, and going forward the focus will be not only on further rate hikes but also on U.S. long-term yields, physical demand, and the profit-and-loss positions of short-term holders.
FOMC raised the policy rate 25bp to 3.75–4.00%, the first hike in three years, lifting the effective federal funds rate.
Fed hike and projections of further tightening push the 10-year Treasury yield up (bond prices down), with focus on long-term yields going forward.
