Fed Raises Rates 25 Basis Points to 3.75% to 4.00%

CoinDesk reported that the U.S. Federal Reserve increased its benchmark fed funds rate target by 25 basis points to 3.75% to 4.00% on Wednesday. This move marked the central bank’s first rate increase since July 2023, concluding a period of monetary policy stability that lasted more than three years.

Committee members voted without dissent to raise rates. The accompanying dots projection indicates that the central bank expects to implement one additional rate hike in 2026.

The FOMC statement outlined the economic conditions driving the decision. “Economic activity is expanding at a solid pace,” the statement read. It further noted that “While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient … Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.”

Market reaction remained muted immediately following the announcement. Bitcoin was little changed from its pre-decision level, trading at $75,700. U.S. stocks continued to move modestly higher, while bond yields drifted slightly lower.

Fed Chair Kevin Warsh is scheduled to hold a post-meeting press conference at 2:30 pm ET.