Federal Reserve Raises Rates by 25 Basis Points – Here Is What Comes Next

• The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4%, its first rate increase since July 2023.
• The FOMC approved the increase unanimously in a 12-0 vote as policymakers continued efforts to bring elevated inflation back toward the Fed’s 2% target.
• Bitcoin traded near $75,500 ahead of the decision, while Ethereum was near $2,380, Solana around $96 and XRP approximately $1.26.

The Federal Reserve raised interest rates by 25 basis points on Wednesday, taking the federal funds target range to 3.75% to 4% as policymakers responded to elevated inflation.

The increase marks the central bank’s first rate hike since July 2023, when the Fed raised rates to a range of 5.25% to 5.50%.

The Fed later began cutting rates in September 2024, eventually bringing the target range down to 3.50% to 3.75% by the end of 2025.

Wednesday’s decision was approved unanimously by the Federal Open Market Committee in a 12-0 vote.

Fed Returns to Rate Hikes

The Federal Reserve said inflation remains elevated and that its latest policy action is intended to support a more timely return toward its 2% inflation objective.

The increase was widely expected by financial markets.

Hours before the announcement, the CME FedWatch Tool showed approximately an 88% probability of a 25-basis-point increase.

Markets were also pricing around a 54% probability that the Fed would leave rates unchanged at 3.75% to 4% following its October meeting.

The increase represents a notable shift after the Fed spent much of the previous period reducing or holding rates. As recently as March and April 2026, the central bank had maintained its 3.50% to 3.75% target range.

Bitcoin Trades Near $75,500

Bitcoin was trading near $75,500 before the Fed announcement after already coming under pressure earlier in the week.

BTC was down roughly 5% since the start of the week following the Senate’s failure to advance the CLARITY Act on Tuesday.

Ethereum was also down more than 8% since Monday and traded near $2,380 ahead of the rate decision.

Solana was trading around $96, while XRP had fallen roughly 15% since Monday to approximately $1.26.

The declines left crypto markets under pressure even before the Fed delivered its widely expected rate increase.

Markets Turn to Fed’s Next Move

Attention now shifts toward how long the Federal Reserve could maintain the higher target range and whether inflation data will require additional tightening.

Before Wednesday’s decision, markets were already leaning toward rates remaining at 3.75% to 4% at the Fed’s next meeting rather than another immediate increase.

For crypto and other risk assets, the path of inflation and future Fed policy could remain important as markets adjust to the central bank’s first rate hike in more than three years.

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