The Fed just raised rates for the first time in three years — and crypto barely blinked. On Wednesday, the Federal Open Market Committee lifted its benchmark rate by a quarter point, to a range of 3.75%-4.00%. The vote was unanimous, 12-0, ending the pause that had held since the last hike back in July 2023.
This was the first big call under new leadership. Kevin Warsh, confirmed by the Senate in May to succeed Jerome Powell, ran the meeting with a distinctly hawkish tone. "I would be hard-pressed to describe broad financial conditions as restrictive," he told reporters, arguing inflation is still running too hot. The committee's own projections back him up: 16 of 18 officials now see at least one more quarter-point increase before year-end, with rates expected to hold near 4.1% through 2027.
None of this rattled traders much, because markets had already priced a 92% chance of the move. Bitcoin swung between $75,000 and $76,500 before settling around $75,600. Ether traded in a $2,370-$2,430 band and closed near $2,376. Most large-cap tokens barely moved — XRP added 1.5%, Solana about 1%, and Zcash, oddly, jumped 6.5%.
What's odd is the backdrop. The hike lands weeks after a US jobs report showed the economy shed 23,000 positions in August — the kind of number that usually nudges central banks toward cutting, not tightening. Warsh made clear his priority sits elsewhere: taming inflation he blames partly on rising oil prices, even if that means squeezing an already-cooling labor market. For anyone carrying a mortgage, a car loan, or credit card debt, borrowing in America just got a little more expensive — and the Fed's own forecast suggests this is only the first step.
