The interest rate hike is no longer the biggest suspense; what the market is really waiting for is "what to do after the hike"
The Federal Reserve is highly likely to initiate its first interest rate hike in over three years this week.
As of now, the market bets that the probability of a 25 basis point increase this week has exceeded 92%. The federal funds rate could be raised from the current range of 3.50% to 3.75% to a range of 3.75% to 4.00%.
In other words, "whether or not to raise interest rates" is getting closer to being a known event.
However, for the financial market, what is truly important is often not the event itself that has already been fully priced in, but whether the market will readjust its expectations afterward.
This is why, this time, what truly deserves attention from the FOMC is not just the 25 basis points.
Rather, it is three questions:
First, how many votes ultimately support the interest rate hike?
Second, is this interest rate hike a one-off, or the beginning of a new round of rate hike cycle?
Third, how will the latest dot plot define the future path of interest rates?
These three questions could determine the future direction of BTC, gold, U.S. stocks, and other risk assets.
The FOMC vote type may be more important than “raising by 25 basis points”
In July of this year, the Federal Reserve decided to maintain interest rates unchanged with a vote of 9 to 3.
At that time, Dallas Fed President Logan, Cleveland Fed President Harker, and Minneapolis Fed President Kashkari all advocated for a rate hike.
If the stance of these three has not changed, then the new chairman Kevin Walsh still needs to persuade officials who previously supported holding rates steady to turn toward a rate hike.
The question lies here.
The Federal Reserve is currently not a monolith.
Federal Reserve governor Waller previously clearly leaned toward continuing to wait, believing that a single rate hike of 25 basis points would not bring CPI back to 2% immediately.
New York Fed President Williams has also recently stated that "waiting and observing" seems more reasonable.
At the same time, some officials are concerned that inflation pressures from factors such as energy prices and tariffs could evolve from temporary issues into more persistent price pressures.
Thus, the final vote type is very worthy of attention.
Because it essentially answers one question:
To what extent does the Federal Reserve believe there is a real need to tighten monetary policy again right now?
If the final count of opposing votes is low, forming a relatively unified interest rate hike outcome, the market might interpret it as:
The Federal Reserve has formed a clearer consensus against inflation.
Conversely, if a significant division emerges, it may indicate that this rate hike is more of a cautious policy adjustment rather than the beginning of a new round of sustained tightening cycle.
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One-time rate hike versus consecutive rate hikes is completely two different matters for the market
This may be the biggest highlight of this meeting.
Currently, inflation in the U.S. is re-accelerating, influenced by several important factors.
These include rising energy prices, tariff impacts, and the resilience of some economic demand.
The question is:
Are these factors temporary, or will they create sustained inflation?
If the Federal Reserve believes that the impacts of oil prices and tariffs will ultimately fade, then this rate hike may be closer to a “preventive rate hike.”
After the hike, policies can temporarily pause to observe the economy.
In this case, while the market might face a tightening of liquidity, it may not necessarily form a sustained tightening expectation.
However, if the Federal Reserve believes that price pressures have started to solidify, then the situation is completely different.
This rate hike may just be the first step in a new tightening cycle.
The market will then no longer trade:
“This time, increase by 25 basis points.”
But rather:
“Will there be more increases by the end of the year?”
This is also why current market expectations for a further rate hike in December are equally noteworthy.
The dot plot may be the true "answer" for the market
After the rate hike, the market will quickly shift its attention to the Fed's latest dot plot.
This time, the dot plot will also include rate expectations for 2029 for the first time.
However, for the market, the two most noteworthy questions still remain:
Will there be continued rate hikes this year?
What will the interest rate path look like in 2027?
The answers to these two questions will directly impact the market's judgment on future liquidity.
Because the financial market hardly ever only trades today's interest rates.
Rather, it concerns:
Whether future capital will become more expensive or cheaper.
If the market believes that after this rate hike, the Federal Reserve will pause, then the rate shock may gradually dissipate.
However, if the dot plot indicates that there is still considerable room for rate hikes in the future, then the market may readjust its expectations for future interest rates.
This means that U.S. Treasury yields, the dollar, and the valuations of risk assets may all undergo readjustment.
For BTC, the real risk is not the 25 basis points
This is also the link between this Federal Reserve meeting and the crypto market that is most worth noting.
Many investors see "rate hike," and their first response might be:
Will BTC fall?
But what should truly be focused on is not that simple.
Because the 25 basis points have already been highly anticipated by the market.
If an event has been fully priced by the market, then when it actually occurs, it may not create a huge additional shock.
What BTC really needs to pay attention to is:
Has the market's expectation of future liquidity changed after the rate hike?
If the Federal Reserve simply conducts a preventive rate hike and then enters a waiting period, then the market may gradually digest this policy change.
However, if the market begins to believe:
The Federal Reserve may still need to continue raising rates.
Then the situation changes.
Because this means that future capital costs may continue to remain high, and the liquidity environment facing risk assets may tighten further.
For high-volatility risk assets like BTC, the valuation logic in the market will naturally be affected.
So, rather than simply understanding it as:
Rate hike = BTC down
It is better to understand it as:
Rate hike → Change in interest rate expectations → Repricing of U.S. Treasuries/Dollar/Liquidity → Change in risk appetite → Impact on BTC.
This is the complete logic of macro policy transmission to the crypto market.
📌 If you want to continuously track BTC, ETH, and the impact of macro data on the market, you can follow the official account "Bitcoin Spring," which clarifies significant market changes and the underlying logic every day.
The Federal Reserve may also face another risk: over-hiking
Of course, the market does not have only one voice.
Some economists have already begun to warn that the Federal Reserve may face risks of policy errors.
Mark Zandi, chief economist at Moody's, believes that in the context of slowing economic growth, if unemployment and layoffs create a negative cycle, it could ultimately push the economy toward recession.
Other economists have also pointed out that the current uptick in inflation does not entirely stem from strong demand; both energy prices and tariffs exhibit significant one-off factors.
This creates a very typical monetary policy dilemma:
Not raising rates, for fear inflation will continue to rise.
Continuing to raise rates, yet worrying about further suppressing the economy.
And this is why the market is especially concerned with disagreements within the Federal Reserve at this time.
Because the real difficulty in the future is not whether to decide to raise rates once, but:
Where will the Federal Reserve ultimately focus its policy between inflation and economic growth?
What should BTC really focus on next?
For the crypto market, this FOMC should not just focus on "25 basis points."
More attention should be paid to a complete set of signals:
First, watch the final voting outcome.
The more unified the vote, the more likely the market is to believe that the Federal Reserve has formed a clearer tightening consensus internally.
Second, watch the dot plot.
Pay close attention to whether there will be a second interest rate hike this year and the interest rate trajectory for 2027.
Third, watch Walsh's press conference statements.
If he emphasizes that inflation risks still exist and releases the possibility of further tightening policies, the market may raise its expectations for future interest rates.
Conversely, if he emphasizes that this action is primarily aimed at short-term inflation risks and provides more cautious subsequent guidance, the market may reduce its concerns about consecutive rate hikes.
Fourth, watch the reactions of the dollar, U.S. Treasury yields, and risk assets.
These market variables will ultimately affect the liquidity environment in the crypto market.
📌 If you want to continuously track BTC, ETH, and the impact of macro data on the market, you can follow the official account "Bitcoin Spring," which clarifies significant market changes and the underlying logic every day.
The Federal Reserve's true test is not raising rates, but whether it can control expectations
This meeting is superficially about deciding a 25 basis point interest rate adjustment.
But the true challenge is whether the Federal Reserve can make the market understand:
Why is it necessary to raise rates now, and what is the plan after the rate hike?
If the market believes this is a one-time policy adjustment, then the shock may be quickly absorbed.
If the market views this merely as the beginning of a new tightening cycle, then the impact would be entirely different.
Thus, for BTC, what truly deserves attention is not:
“Will the Federal Reserve raise rates today?”
But rather:
“After the rate hike, will the market reprice future liquidity?”
This is where this FOMC may truly impact the crypto market.
📌 Web3 Mr. X: The rate hike is just the first hurdle; the real show is still to come
The market has essentially accepted a 25 basis point increase this week.
Therefore, what really deserves attention has shifted from "to raise or not" to "what to do after the hike."
The final vote outcome, dot plot, and Walsh's policy statements will collectively determine how the market interprets this rate hike.
And for BTC investors, the most important thing is not to guess a short-term rise or fall.
But rather to observe:
Whether the Federal Reserve's policy path is genuinely tightening liquidity again, or if it is entering an observation period after making a one-time adjustment.
Because it is not just one interest rate decision that determines the mid-term performance of risk assets.
It is the market's expectations for future funding costs and liquidity.
—— I am Mr. X of Web3, with six years of growth in Web3, focusing on Bitcoin, the crypto market, macroeconomics, and industry trends. If you want to continuously track BTC, ETH, HYPE, and the impact of macro data on the market, you can follow the official account "Bitcoin Spring." Understand the hotspots, insight the logic, establish your own judgment, rather than just focusing on price fluctuations.
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