🚨 THE FED HIKED RATES… BUT WHY DID BITCOIN & STOCKS NOT CRASH?LET ME TELL YOU HIDDEN Things ‼️‼️
The Fed raised rates by 25 bps, taking the policy rate to 3.75%–4.00%.
Normally:
Rate hike = stocks down + crypto dump.
But this time, markets held surprisingly well.
The Nasdaq stayed almost flat, semiconductor stocks remained strong, and Bitcoin avoided a major crash.
So what happened?
The key was the dot plot.
The Fed’s median year-end rate projection moved to around 4.1%, suggesting another 25 bps hike could still happen later this year.
But markets are now looking beyond just one rate decision.
WHY ARE MARKETS HOLDING UP?
Because the U.S. economy is still strong.
August retail sales rose around 1.2% MoM, while core retail sales increased roughly 1.4%.
The Fed also raised its GDP growth forecast from 2.2% → 2.3% and lowered its unemployment projection from 4.3% → 4.1%.
Simply put:
The economy is absorbing higher rates better than expected.
THE BIGGER RISK 👀
The 10-year Treasury yield moved above 5%.
Why?
• Strong economic activity
• Massive AI investment
• Government borrowing
• Geopolitical uncertainty
Strong growth sounds bullish, but it also makes it harder for the Fed to cut rates quickly.
WHAT MATTERS NEXT?
Not just another 25 bps hike.
Now Watch:
Oil prices → Inflation → Treasury yields → Geopolitics
If oil prices fall and geopolitical tensions cool, inflation pressure could ease.
That could reduce the need for further tightening and eventually create a stronger environment for Bitcoin, altcoins and U.S. stocks.
This is your take home message
A rate hike does NOT automatically mean a market crash anymore.
The real question is:
How long can the economy handle higher rates and when will the Fed finally be able to ease again?
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