The Federal Reserve raises interest rates after more than three years, and the market is not as surprised as imagined
On September 17, Beijing time, the Federal Reserve announced that it would raise the target range for the federal funds rate by 25 basis points to 3.75%–4.00%.
This is the first rate hike by the Federal Reserve since July 2023.
In terms of the outcome, this rate hike in itself did not bring much surprise to the market, as the market had basically digested the expectation of this 25 basis point increase beforehand.
What is more noteworthy is the signal released by the Federal Reserve regarding the subsequent interest rate path.
The latest dot plot shows that most officials expect at least one more rate hike in 2026.
In other words, the market now faces not the question of "Will the Federal Reserve raise rates again?" but rather:
How far will this round of tightening go?
The real change is that the market is starting to reprice the October rate hike
Right after the Federal Reserve announced the rate hike, Goldman Sachs further adjusted its interest rate judgment.
Goldman Sachs now expects the Federal Reserve to raise rates by another 25 basis points in October.
This marks a significant change from its previous judgment.
One of the core reasons Goldman Sachs turned is the short-term hawkish signal released by the Federal Reserve.
Federal Reserve Chairman Kevin Warsh stated that inflation is still "too high," and this rate hike only removed part of the previous looseness.
In other words, the Federal Reserve did not signal that "we will stop raising rates here."
On the contrary, from the policy stance, there is still a possibility of further tightening monetary policy.
The market's pricing probability for another rate hike in October has now exceeded 50%.
This means that the variable the market really needs to trade next is likely:
Will the Federal Reserve raise rates again in October?
📌 If you want to keep tracking BTC, ETH, and the macro data's impact on the market, you can follow the public account "Bitcoin Spring," which clarifies important market changes and the logic behind them every day.
Why did BTC not crash directly due to the rate hike?
If we look at it purely from the logic of "rate hike = negative for risk assets," Bitcoin BTC seems to be under greater pressure.
But the actual situation is not that simple.
After the Federal Reserve announced its rate decision, BTC fluctuated around $76,000 for a time, and the latest trading price still remains around this level.
The important reason behind this is:
The market is never trading an isolated interest rate number, but the difference between the "actual interest rate outcome" and the "market's previous expectations."
This 25 basis point rate hike had already been widely anticipated.
Therefore, when the real outcome landed, the market did not experience particularly violent repricing.
This is also why we see a more interesting market contrast:
The Federal Reserve raises rates again, but BTC does not decline sharply according to traditional logic.
Of course, this does not mean that the rate hike has no impact on BTC.
The real influence may gradually manifest in the subsequent interest rate path.
For BTC, what really needs attention is not these 25 basis points
If we only focus on "the Federal Reserve raised rates by 25 basis points," it is easy to overlook the more important question.
What truly affects BTC is whether the financial environment will continue to tighten in the coming months.
Because rising interest rates mean higher funding costs.
If the market further expects the Federal Reserve to raise rates again in October, then the liquidity of the dollar and the overall financial conditions may continue to be under pressure.
For risk assets like BTC, this usually means that valuation expansion will face greater pressure.
However, this also cannot be simply understood as:
Rate hike = BTC must drop.
BTC's price will also be influenced by the dollar, U.S. treasury yields, inflation, institutional funds, and risk appetite.
Previously, CoinDesk pointed out that the 10-year U.S. treasury yield is close to 5%, and at the same time, oil prices remain high, all of which may complicate inflation pressures.
So what the market is really trading right now is a bigger question:
Is inflation in the United States really becoming difficult to control again?
📌 If you want to keep tracking BTC, ETH, and the macro data's impact on the market, you can follow the public account "Bitcoin Spring," which clarifies important market changes and the logic behind them every day.
Inflation is the key variable determining the October interest rate path
Why is the Federal Reserve starting to raise rates again now?
The core reason is still inflation.
The Federal Reserve stated in its announcement that economic activity remains strong, but inflation is still elevated.
This creates a rather tricky situation:
The economy is not showing a clear slowdown, but inflation has not fully returned to target levels.
For the Federal Reserve, if the economy can still bear higher interest rates, then maintaining a tighter monetary policy could become an important option to suppress inflation.
This is also why the market is increasingly focusing on the upcoming inflation data.
In particular:
CPI, PCE, core inflation, and employment market data.
If the subsequent data continues to show persistent inflation pressure, then expectations for a rate hike in October may further increase.
Conversely, if inflation shows significant cooling, the market's pricing for subsequent rate hikes may also be readjusted.
So, instead of guessing whether BTC will rise or fall next, it is more worth paying attention to:
Will the data in the coming weeks change the market's expectations for the Federal Reserve?
What BTC is currently trading is "how long the tightening will last"
Putting the whole logic together, it becomes very clear:
The Federal Reserve raised rates by 25 basis points in September.
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The dot plot shows there may be another rate hike this year.
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The Federal Reserve Chairman releases a hawkish signal.
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Goldman Sachs begins to expect another rate hike in October.
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The market refocuses on whether the U.S. financial environment will further tighten.
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BTC, although not experiencing a sharp decline directly due to the rate hike, still faces pressure on liquidity expectations.
This is also the most noteworthy aspect of the current BTC market.
This time, the market already knew in advance that the Federal Reserve would raise rates.
What is likely to bring about the next round of repricing is:
Will there be another rate hike in October, and will the Federal Reserve continue to maintain its hawkish stance thereafter?
📌 If you want to track the key support and pressure for BTC daily, you can follow the public account "Bitcoin Spring," to continuously receive market hotspots and trading logic.
What should BTC really look at next?
For ordinary investors, there is no need to guess every day what the Federal Reserve's next statement will be.
It is enough to focus on several variables.
First, U.S. inflation data.
Especially CPI and PCE, as they directly affect the market's judgment of the Federal Reserve's subsequent policies.
Second, the policy statements of Federal Reserve officials.
If more officials begin to support further rate hikes, then market rate expectations may be revised upwards.
Third, U.S. treasury yields and the dollar.
They can more directly reflect whether financial conditions are continuing to tighten.
Fourth, BTC's own price performance.
If the macro environment is tightening, but BTC is still able to maintain relative strength, then the market may be trading other supporting factors.
Conversely, if macro pressure continues to increase and BTC persistently breaks through key levels, then risk appetite may be further declining.
"The Federal Reserve raised rates, will BTC drop?"
But rather:
"Will the market continue to revise upwards its expectations for future rates?"
📌 Web3 Mr. X: The Federal Reserve's rate hike is just the beginning; what the market is really trading is the next step
This rate hike itself is not surprising.
What is truly worth paying attention to is that after the Federal Reserve re-enters the rate hiking track, the market's expectations for future rates are changing.
Goldman Sachs has begun to expect another rate hike in October, and the market's current pricing for an October rate hike has already exceeded 50%.
For BTC, this means that the short-term macro environment still bears pressure.
But at the same time, it is important to note that BTC did not react as violently as the market imagined upon this rate hike landing.
This precisely indicates:
The market is already trading expectations in advance, and what may truly determine the next round of market movement is how those expectations will change next.
So next, rather than focusing on a single rate hike, it is better to keep an eye on:
Inflation data, the October Federal Reserve meeting, U.S. treasury yields, and BTC's actual reaction to these macro variables.
This is the key to understanding this round of the market.
—— I am Mr. X from Web3, with 6 years of growth in Web3, focused on Bitcoin, the crypto market, macroeconomics, and industry trends. If you want to continuously track BTC, ETH, HYPE, and the impact of macro data on the market, you can follow the public account "Bitcoin Spring." Understand the hotspots, insight the logic, and establish your own judgments rather than just focusing on price fluctuations.
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