- On September 16, the FOMC voted 12-0 to raise rates a quarter point to 3.75%-4%.
- Most Fed officials expect another hike by year-end, with 16 of 18 forecasts showing one.
- Odds of an October hike fell to around 20% after August core PCE cooled to 3.0%.
Federal Reserve officials still see another interest rate increase as likely before the end of 2026, according to the minutes of the September 15–16 meeting released Wednesday. The minutes showed that most participants expected another hike but remained dependent on incoming economic and financial data rather than committing to a specific meeting. For Bitcoin, the focus now shifts to how the Fed’s hawkish stance could affect risk assets, with BTC testing the $82,500-$87,000 range.
What Happened at the September FOMC Meeting
- The committee voted 12-0 to raise the federal funds rate a quarter point to 3.75% to 4%, even though several officials had signaled reluctance beforehand.
- Most participants said another increase would likely be appropriate by year-end, while stressing they approach each meeting with an open mind.
- Sixteen of 18 forecasters expect another hike. Projections show one more this year and none in 2027.
- Officials cited inflation above 2% for more than five years, unemployment of 4.1% and upside price risks from energy, tariffs and AI investment.
- Chair Kevin Warsh, in the role since May, submitted no forecast and described the hike as removing “a dose of accommodation.”
What Changed After the Meeting
Markets first priced a follow-up hike in October. The odds have since dropped from about 55% to 20%, according to sources, and the two-year Treasury yield eased to 4.77%.
August inflation helps explain the shift. The minutes said Fed staff estimated headline PCE inflation at 3.8% and core PCE inflation at 3.4%, or 3.6% and 3.2%, respectively, under the Bureau of Economic Analysis’ (BEA) new method. Actual readings were 3.4% and 3.0%, below both, partly because of changed calculations. Several officials have also said the Fed need not rush.
Longer-term costs moved the other way. Yields across the 2- to 10-year range rose about 35 basis points between meetings, and the minutes list heavy AI infrastructure borrowing among the pressures lifting term premiums.
Why This Matters for BTC
Bitcoin’s reaction to the FOMC minutes was relatively muted. BTC briefly moved higher after the release, even as the minutes showed that most Fed participants still saw another rate increase as likely before the end of 2026. The limited reaction suggests traders had already priced in much of the hawkish outlook.
The bigger issue for Bitcoin is what happens to rate expectations from here. Markets have sharply reduced the probability of an October hike to around 20%, while August inflation data came in below the estimates cited in the minutes. If softer inflation keeps pushing rate-hike expectations lower, that could reduce pressure from interest rates and Treasury yields on Bitcoin and other risk assets.
For now, BTC remains caught between two forces: the Fed’s continued concern about inflation and the market’s reduced expectations for another immediate hike. The $82,500-$87,000 range is therefore important, as a sustained break from this area could show whether traders are treating the Fed’s latest message as a bearish macro signal or looking beyond the near-term policy risk.
Related: Rising U.S. 30-Year Yield Adds Pressure as BTC Eyes $81.2K Support
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