At around 2:00 a.m. Beijing time on September 17, the Federal Reserve announced a 25-basis-point rate hike. The target range for the federal funds rate was raised to 3.75%–4.00%, the first hike since July 2023.
By the simplest logic, a rate hike means higher capital costs and tighter liquidity. Risk assets such as stocks and Bitcoin should face pressure, and gold should also come under pressure because the holding cost of an interest-free asset increases.
But this time, the market put on a rather interesting show:
U.S. stocks fell on the 16th and rebounded on the 17th. After the Fed announced the rate hike, Bitcoin did not see a sustained drop; it then moved back above around $76,000. Gold, meanwhile, first dipped to a temporary low after the hike, then rebounded quickly.
Why?
Because what the market truly trades is never just the two words “rate hike.”
First layer: Rate hikes have already been priced in by the market in advance.
This 25-basis-point hike wasn’t completely out of the blue; the market had already been pricing it in.
So the real question isn’t:
“Did the Fed hike rates?”
Instead, it’s:
“Has the magnitude and future path of Fed rate hikes turned out to be worse than what the market originally expected?”
When a piece of bad news has already been digested by the market in advance, after the news is truly released, some funds may start closing out their previously held safe-haven positions.
That’s why sometimes you see:
Even though it was a negative development, prices went up instead.
Second layer: the market starts trading the “future.”
A rate hike is just one point in time.
What truly affects asset prices is where future interest rates will end up.
This time the Fed clearly stated that inflation is still too high, while economic activity has maintained a certain level of resilience; the market therefore continues to watch whether there will be further rate hikes in the future.
So what’s truly worth watching now isn’t simply “rate hike = down,” but rather:
Will the hikes continue in the future?
How long will high rates last?
Can the US economy withstand it?
When will inflation actually fall?
Third layer: Why can US stocks rebound?
US stocks fell on the 16th after the rate hike: the Dow fell 1.21%, the S&P 500 fell 0.44%, and the Nasdaq was basically flat. On the 17th, market sentiment recovered, and major indexes such as the Nasdaq and S&P 500 moved higher again.
One important reason is that what’s traded in US stocks isn’t only interest rates—it also includes corporate earnings, technology investment, and expectations for economic growth.
If the market thinks:
“Even though the rate hike happened, it didn’t bring a more severe economic shock than expected.”
Then some of the panic that was created by the earlier rate hike may be repaired.
Fourth layer: Why didn’t Bitcoin drop according to the traditional logic either?
At its core, Bitcoin is still a high-volatility risk asset, so macro liquidity matters a lot to it.
But this time, Bitcoin’s immediate reaction to the rate hike was relatively limited. After the Fed announced the hike, BTC mainly traded in a range of about $75,000—$76,500, before returning to around $76,000.
This doesn’t mean “rate hikes are bullish for Bitcoin.”
More precisely, the question is:
The market is reassessing just how much additional tightening this rate hike actually implies.
If the market believes the worst policy expectations have already been priced in, then once the hike is implemented, risk assets may see a repair.
Fifth layer: Why can gold rise too?
This is possibly the most interesting part of this round of the market.
The traditional logic is:
Rate hike → US Treasury yields rise → the opportunity cost of holding gold increases → gold faces pressure.
In fact, gold did fall for a time after the Fed announced a rate hike.
But then the situation changed.
On September 17, as the dollar and US Treasury yields fell back, and oil prices weakened, gold rebounded again. Reuters data show that spot gold rose by more than 2% at one point that day.
This shows that gold is currently influenced by several variables at the same time:
Interest rates
U.S. dollar
US Treasury yield
Inflation expectations
Geopolitical risk
Central bank demand
So gold is not simply:
“If it’s hiked, it falls; if it’s cut, it rises.”
This is also why this time you saw:
A Fed rate hike,
Gold fell first,
Then it rebounded quickly again.
Sixth layer: What’s really worth watching is these four things.
If we draw the current market as a map, it’s roughly:
Fed interest rate
↓
US Treasury yields
↓
U.S. dollar
↓
Global risk appetite
↓
US stocks / Bitcoin / Gold
But this isn’t a single straight line in a mechanical sense.
For example:
A rising dollar usually puts pressure on gold;
When US Treasury yields rise, it also usually increases the opportunity cost of holding gold;
But if oil prices fall and ease inflation pressure, while US Treasury yields also decline and the dollar weakens, gold may regain support. The gold rebound on September 17 reflects this change.
For Bitcoin and US stocks, you need to further watch:
Is the dollar continuing to strengthen?
Will US Treasury yields break above the recent highs again?
Has the market’s expectation for the next rate hike heated up?
Will corporate earnings and economic data remain strong?
So what’s really worth remembering this time isn’t:
“It’s been hiked—why is it still up?”
Instead:
**Markets are never just trading news—they’re trading the “gap” between expectations and reality.**
A rate hike itself is only one event.
What really determines prices is what the market already expected, and what changed in investors’ judgment about the future after the news was released.
So next, you can focus on four markets:
**US stocks: look at corporate earnings and pressure from interest rates.**
**Bitcoin: look at the U.S. dollar, liquidity, and risk appetite.**
**Gold: look at the U.S. dollar, Treasury yields, inflation, and demand for safe havens.**
**US Treasuries: look at whether yields keep rising.**
If there are clear divergences among these four markets, it’s often more worth paying attention to than just watching “a 25-basis-point Fed hike” by itself
