The Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75%-4.00% on September 16, 2026, marking its first hike since July 2023. The policy reversal was driven by stubbornly high inflation, with core CPI coming in at 0.29% month-over-month in August 2026, beating expectations. The Fed signaled additional tightening ahead, with surveyed economists expecting 50 to 75 basis points of further hikes by early 2027. The tighter monetary policy could weigh on speculative assets like bitcoin, which fell roughly 65% from its November 2021 peak during the 2022-2023 rate-hiking cycle.
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