Fed Raises Rates Amid Inflation Fears, Bitcoin Surges
The Federal Reserve raised interest rates for the first time since 2023, setting the benchmark rate within a range of 3.75% to 4.00%. The decision was unanimous among all 12 members of the Federal Open Market Committee (FOMC).
The move was anticipated by financial markets, with CME FedWatch data indicating a 93% implied probability favoring the hike. Banking institutions such as Barclays, Citigroup, and JPMorgan project cumulative policy tightening of 50 basis points before year-end.
Inflationary pressures fueled by crude oil trading above $100 per barrel constrained the central bank's leeway to pause. The Producer Price Index (PPI) rose 5.4% year-over-year in August, while the Consumer Price Index (CPI) posted a 0.4% monthly increase.
The rate hike triggered an immediate reaction in Bitcoin's price, which traded between $75,000 and $75,800 before climbing to $76,000. Industry analysts noted that a daily close below $73,500 could expose downside targets toward $71,000 or even $66,900.