Fed Raises Rates 25 Basis Points to 3.75%-4%, First Hike Since 2023, as Bitcoin Holds Near $76,000

The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4% on Wednesday, its first increase since 2023, with all 12 voting members backing the move, according to the Federal Reserve's own statement.

The decision came under Chair Kevin Warsh, who told reporters at his press conference that "the plain fact is that inflation is too high and has been for too long."

Warsh said the committee needed more evidence that underlying inflation was moving toward its 2% target "clearly and at sufficient speed" before it would consider pausing, adding that "this summer's inflation readings do not tell me that underlying trends have meaningfully improved," according to coverage of his remarks. The Fed's updated projections show 12 of 18 committee members expect at least one more quarter-point hike before year-end, and four expect half a point or more of further tightening, a hawkish skew that leaves the door open to a longer cycle than markets had priced heading into the meeting.

The FOMC statement dropped earlier language referencing conflict in the Middle East even as elevated oil prices, with Brent crude trading near $108 a barrel amid the ongoing war in Iran, continued to complicate the inflation picture. In remarks to the press, Warsh attributed part of the rise in long-term Treasury yields to "hotspots around the world" beyond energy markets alone, alongside underlying economic strength and heavy capital spending by large technology companies.