- The Federal Reserve raised its benchmark rate by 25 basis points to a 3.75%-4.00% range in a unanimous vote, marking its first hike since 2023.
- Chair Kevin Warsh acknowledged the economy has strengthened but called inflation “the problem,” while declining to comment on President Trump’s reaction.
- Bitcoin briefly spiked on the news but stabilized near $75,500, as markets had already priced in the move.
The Federal Reserve raised interest rates on Wednesday for the first time since 2023, lifting its benchmark range to 3.75%-4.00% in a unanimous vote. It is the clearest signal yet that Chair Kevin Warsh’s inflation talk was never just talk.
“The economy has indeed strengthened,” Warsh told reporters. “Inflation is the problem.”
Higher rates make borrowing more expensive, slowing spending and theoretically limiting inflation. But higher interest rates generally hurt assets that thrive on cheaper investments, like stocks and Bitcoin.
Asked directly about Trump’s reaction, Warsh declined to comment and fell back on the same line he used at his Jackson Hole keynote in August. “We will deliver price stability. We’re committed to a discipline, not a decision.”
Markets had already done the math, with Wall Street pricing in the move for weeks. Bitcoin barely flinched, trading near $75,500, down about half a percent on the day.
On Artificial Intelligence, Warsh was careful to draw a line around his own job. “I’ve spent a lot of time thinking about AI,” he said, but argued Fed independence means staying out of AI policymaking itself.
The Fed’s updated projections still point to one more hike before year-end. If Warsh follows through, Wednesday’s move will not be the last time Bitcoin and the rest of the market has to shrug off a rate decision it saw coming.
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