Bitcoin and ether experienced sharp volatility on Wednesday subsequent to the U.S. Federal Reserve executing a unanimous quarter-percentage-point interest rate increase, marking the central bank’s initial rate hike in over three years.
Bitcoin (BTC) oscillated between approximately $75,000 and $76,500 immediately following the announcement, changing hands around $75,600 at the time of publication. Ether (ETH) fluctuated between roughly $2,370 and $2,430 before stabilizing close to the bottom of that band at $2,376.
The Federal Open Market Committee passed a 12-0 vote to elevate its target interval for the federal funds rate to 3.75%-4%. This adjustment represented the Fed’s first upward shift since July 2023, when the Powell-directed central bank bumped rates up by 25 basis points to 5.25%-5.5%.
Wednesday’s upward adjustment was largely anticipated by market participants. During the hours leading up to the verdict, CME FedWatch indicated that traders had priced in a 92% likelihood of a 25-basis-point increase, dropping marginally from approximately 96% the preceding day.
Hawkish Warsh
Warsh maintained a hawkish tone during his opening remarks, stating that the economy seems to be gaining momentum and that overall financial conditions are not excessively restrictive.
“I would find it difficult to characterize broad financial conditions as restrictive,” Warsh remarked, pointing out that this perspective was broadly supported across the committee. “Consequently, we eliminated a measure of accommodation.”
The economic projections additionally indicate that additional monetary tightening remains a possibility. Sixteen out of 18 policymakers estimate at least one extra quarter-point hike during the current year.
This resolution places the Fed in direct conflict with statements issued earlier this month by President Donald Trump, who asserted that the U.S. ought to maintain the lowest interest rates globally and warned that he might halt trade with nations running trade deficits with the U.S. unless the Fed lowered borrowing costs.
Warsh kept his comments restrained regarding those threats and the president broadly when queried during the question-and-answer segment of the press conference.
Analyst outlooks
Lewis Huang, a researcher at digital asset exchange Bitget, pointed out that bitcoin might absorb immediate market shocks better than traditional stocks, mentioning that BTC swung roughly four times as much as the S&P 500 throughout the prior two FOMC trading sessions.
“The market had one rate increase fully anticipated, and the dot plot has laid out a sequence,” Huang stated.
Nevertheless, he cautioned that the trajectory toward further monetary tightening could face challenges if energy costs fuel inflationary pressures. He pointed to gasoline prices advancing nearly 4% within a single month alongside diesel jumping 60% to reach a record peak, suggesting these pressures might dissipate faster than general inflation.
That introduces a hazard, Huang noted, “wherein the Fed continues tightening monetary policy long after the initial energy shock has started to dissipate.”
Elsewhere across the digital asset sector, the immediate market response remained relatively subdued. Most top-20 cryptocurrencies traded largely flat or posted gains of roughly 0.5% after the announcement. XRP (XRP) added about 1.5%, Solana (SOL) increased by 1%, whereas Zcash (ZEC) emerged as an outlier with a 6.5% advance.
Originally published at https://www.theblock.co/news/markets/2026-09-16-bitcoin-ether-swing-unanimous-quarter-point-fed-rate-hike-warsh-aim-inflation-415307.
