The Federal Reserve has finally raised interest rates again after three years.
On September 16, the Fed increased rates by 0.25%, bringing the target range to 3.75%–4.00%. The Fed said inflation is still too high, so it wants to keep pressure on inflation and bring it back toward its 2% target.
The Fed’s latest dot plot also shows that another rate hike could happen before the end of 2026. However, this is only a forecast, not a confirmed decision.
In the short term, the market had already expected this rate hike. Because of that, some of the negative impact may already have been priced into Bitcoin and other risk assets. This can explain why Bitcoin has shown some recovery after the announcement.
But the bigger picture is still uncertain. Higher interest rates generally put pressure on risk assets like Bitcoin because investors can get higher returns from safer assets.
Personally, I think the second rate hike is not guaranteed.
If oil prices fall and inflation starts coming down, the Fed may decide that another hike is no longer necessary. The situation in the Middle East is one important factor because higher oil prices can increase inflation. If geopolitical tensions ease and energy prices decline, inflation pressure could also decrease.
So, for Bitcoin, the key things to watch now are:
1. US inflation data
2. Oil prices
3. The next Fed meetings
4. US employment data
5. Market expectations for another rate hike
The important point is simple: the Fed has become more hawkish, but another rate hike is still only a possibility.
On September 16, the Fed increased rates by 0.25%, bringing the target range to 3.75%–4.00%. The Fed said inflation is still too high, so it wants to keep pressure on inflation and bring it back toward its 2% target.
The Fed’s latest dot plot also shows that another rate hike could happen before the end of 2026. However, this is only a forecast, not a confirmed decision.
In the short term, the market had already expected this rate hike. Because of that, some of the negative impact may already have been priced into Bitcoin and other risk assets. This can explain why Bitcoin has shown some recovery after the announcement.
But the bigger picture is still uncertain. Higher interest rates generally put pressure on risk assets like Bitcoin because investors can get higher returns from safer assets.
Personally, I think the second rate hike is not guaranteed.
If oil prices fall and inflation starts coming down, the Fed may decide that another hike is no longer necessary. The situation in the Middle East is one important factor because higher oil prices can increase inflation. If geopolitical tensions ease and energy prices decline, inflation pressure could also decrease.
So, for Bitcoin, the key things to watch now are:
1. US inflation data
2. Oil prices
3. The next Fed meetings
4. US employment data
5. Market expectations for another rate hike
The important point is simple: the Fed has become more hawkish, but another rate hike is still only a possibility.
