Fed Hikes to 4%: Why Are 16 Officials Still Not Done?

The Federal Reserve raised interest rates by a quarter point on Wednesday, lifting the target range to 3.75% to 4.00%. All 12 voting officials backed the move, the first increase since 2023.

Forecasts released alongside the decision went further than the hike itself. A total of 16 of 18 policymakers now expect at least one more increase before the year ends.

The Statement Dropped Its Explanation for Inflation

The wording moved further than the rate did. In July, the Fed pinned part of high inflation on supply shocks in sectors including energy. That line is gone.

One claim replaced it. Wednesday’s increase will support a “timelier” return to the 2% goal. The closing promise survived intact, that the committee will deliver price stability.

Officials also raised their assessment of business investment and swapped a reference to the Middle East conflict for broader geopolitical developments.

Projections Show 16 Officials Want Another Hike

The dot plot, a chart where each of 18 policymakers marks where they think rates should sit, turned sharply hawkish.

Officials put core Personal Consumption Expenditures (PCE) inflation, the Fed’s preferred price gauge, at 3.4% in December 2026 and 2.5% a year later. They cut the unemployment forecast to 4.1% for both years, from 4.3%.

BeInCrypto reported in June that nine officials had broken ranks. That count has now nearly doubled.

Bitcoin Climbed While Gold Gave Up Gains

Bitcoin traded near $76,152 after the release, down 0.7% over 24 hours. Prices jumped from roughly $75,350 to above $76,100 within minutes of the announcement.

Gold went the other way. Spot prices spiked toward $4,368, then sold off hard and settled near $4,333.

The hike landed in a week already going badly for crypto. Bitcoin and XRP slid after the CLARITY Act’s failure in the Senate, a bill that would have set out which US regulator oversees digital assets, wiping out more than $300 million in leveraged bets.

White House adviser Christopher Phelan warned against a hike this week, citing falling inflation data. Chair Kevin Warsh has delivered zero cuts since Powell left.

Traders are keeping their bets on another increase this year. Warsh’s press conference decides whether that holds.