Fed Hikes Rates by 25 Basis Points Amid Elevated Inflation

The Federal Reserve has raised interest rates by 25 basis points to a range of 3.75% to 4%, in an effort to combat elevated inflation and bring it back towards its 2% target.

The decision was unanimous, with all 12 members of the Federal Open Market Committee voting in favor of the increase. The move had been largely expected by markets, with a roughly 88% probability of a 25 basis point hike indicated by the CME FedWatch Tool hours before the announcement.

Bitcoin and other major cryptocurrencies were initially affected by the Senate's failure to advance the CLARITY Act on Tuesday, but began surging following the Fed release. Ethereum, Solana, and XRP each rose more than 1% after the announcement, as markets signaled that the rate increase had largely been priced in.