Fed Hikes Rates for the First Time Since 2023, Bitcoin Spikes

In brief

• The Fed raised its benchmark rate by 25 basis points to a range of 3.75% to 4%, its first hike since 2023, after traders had priced in a 93% chance of the move, per CME's FedWatch tool.
• The vote was backed by all the Fed Governors.
• Bitcoin spiked briefly in the minutes after the decision.

The Federal Reserve raised interest rates by a quarter point Wednesday, its first hike since 2023, lifting the federal funds rate to a target range of 3.75% to 4% from 3.50% to 3.75%.

Bitcoin remained flat in the minutes before and after the announcement, swinging between $75,00 and $75,800. Shortly after, however, it spiked to $76,000 and is rising at the moment. The broader crypto market lost around 2.18% on the day.

The move landed almost exactly as markets expected. Traders had priced in a 93% chance of a hike heading into the decision, according to CME's FedWatch tool, up from under 50% a month earlier. All 12 members of the Federal Open Market Committee backed the move.

In its statement, the Committee said economic activity was "expanding at a solid pace" and that job gains had "kept pace with the workforce," but that inflation remains elevated. It said Wednesday's move would support a "timelier return" to its 2% target.