Fed Raises Rates to 3.75%–4.00% in First Hike Since 2023: What the September FOMC Means for Crypto

The Federal Reserve has officially shifted its monetary policy stance, concluding its September meeting with a decisive move to tighten financial conditions. Confirmed via the Federal Reserve’s own transcript of Chairman Warsh’s September 16 press conference, and corroborated by KPMG, Schwab, Advisor Perspectives, and MSN, the central bank raised its target interest rate range by 25 basis points to Fed 3.75% 4.00%. This marks the first rate hike since 2023 (specifically, since July 2023), signaling a notable pivot in the Fed’s approach to inflation and economic management as we move through the FOMC September 2026 cycle.

The Decision and Voting Dynamics

The decision to raise the target range by 25 basis points to Fed 3.75% 4.00% was passed unanimously with a 12-0 vote. This unified front represents a significant shift from the previous meeting. In July, the committee voted 9-3 to hold rates steady, with the three dissenting members actively pushing for a rate increase. The September unanimity indicates that the committee has now aligned around the necessity of this Warsh rate hike to address persistent inflationary pressures.

Economic Projections and the Dot Plot

To avoid the data conflicts seen in secondary reporting (where some sources cited 4.00%–4.25% or 4.1%–4.4%), this analysis relies strictly on the median figures provided directly in Chairman Warsh’s transcript.

Metric	Projection / Detail
Median Rate (End of 2026)	4.10%
Median Rate (End of 2027)	4.10%
Total PCE Inflation (This Year)	3.70%
Total PCE Inflation (Next Year)	2.30%
Unemployment Rate	Holds steady at ~4.1%

The Fed dot plot September 2026 reveals a hawkish tilt among participants. Of the 18 committee members, 16 expect at least one more hike this year. Specifically, 12 participants see one additional hike, 4 see two additional hikes, and only 2 see no further hikes. Notably, Chairman Warsh did not submit his own individual dot projection. When pressed, he stated, "I'm not in the forward guidance business," and framed the current Fed rate hike simply as removing "a dose of accommodation" from the economy, rather than signaling a rigid, predetermined path.

Crypto Market Reaction: Priced In and Absorbed

The crypto market’s initial reaction to the Bitcoin Fed hike news was muted, largely because the move was already heavily anticipated. According to the CME FedWatch Tool, the 25 basis point increase was approximately 92% priced in by the market prior to the announcement.

Asset	Immediate Post-Decision Trading Range	Source
Bitcoin (BTC)	~$75,000 – $76,500	The Block
Ethereum (ETH)	~$2,370 – $2,430	The Block

This contained volatility aligns with the perspective of Bitget analyst Lewis Huang, who noted that BTC may absorb more of the rate shock than traditional equities, given that the tightening was already largely discounted by market participants.

The Sequence of Events: A Subsequent Rebound

While the immediate reaction was muted, the broader market narrative shifted in the days following the decision. According to 24/7 Wall St, BTC later rebounded to trade around the $85,000 level. It is critical to present this as a sequence of events, not a causal claim. The rebound occurred in a window where the Fed executed the hike and the CLARITY Act failed to advance in the Senate. The market’s subsequent strength suggests that crypto assets are currently decoupling from traditional rate-hike fears, potentially driven by a combination of macroeconomic absorption and shifting regulatory narratives, rather than the rate decision itself acting as a direct catalyst for the rally.

Looking Ahead

Market participants will now turn their attention to the next FOMC meeting on October 28 (scheduled for October 27–28). Given the Fed’s own projections indicating that a majority of participants expect at least one more hike before year-end, the October meeting will be scrutinized for any shifts in the median dot plot or changes in the committee’s tolerance for inflation. For now, the Fed has made its stance clear: accommodation is being withdrawn, but the crypto market has demonstrated a surprising capacity to digest this first rate hike since 2023 without derailing its broader momentum.

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Fed raises rates by 25 bps for first time since 2023 — what it means for Bitcoin