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Morning Edition · Thursday, September 17, 2026Published at 1:45 AM EDT · New York
Federal Reserve Raises Rates to 3.75%-4.00%, and Goldman Sachs Expects Another Increase in October
The first increase since July 2023 reverses the easing assumption that had shaped crypto trading positions through 2025, and bitcoin held above $76,000 instead of falling further.
The Federal Reserve raised its policy rate by 25 basis points on Tuesday, placing the federal funds target range at 3.75% to 4.00%. It is the first increase since July 2023, and it ends a three-year period in which every policy question was about the timing and size of cuts.
Goldman Sachs changed its forecast within hours, and now expects a second quarter-point increase in October, pointing to the central bank's own hawkish near-term projections rather than to new data. The bank's shift was repeated across trading desks and reported the same evening.
President Donald Trump said the opposite. "I want the Fed to be independent, but my opinion, I'm very good at this stuff, is interest rates are too high," he said, in remarks circulated by Cointelegraph, after separately calling inflation "too high." Both statements cannot be satisfied at once, and the tension between them is now the central political fact around United States monetary policy.
Digital asset prices did not react sharply to the decision. Bitcoin traded above $76,000 after the announcement, and crypto.news put the level near $76,200 at the close of a week that also included the failed Senate vote on United States market-structure legislation. Cointelegraph, citing mortgage application data, reported that purchase applications have fallen to levels last seen in 1995, which is the clearest sign that the tightening is already transmitting through housing credit even before a second increase.
What this means
Higher short-term interest rates raise the cost of borrowing against every leveraged position in crypto, through two channels at once. Borrowing against digital assets becomes more expensive, and the dollar strengthens, which reduces the valuation of long-duration and non-yielding assets. The most exposed are the bitcoin treasury companies that fund their purchases with debt and preferred shares, and the miners committing capital to multi-year datacenter construction. Holders with no leverage feel this only through price. If inflation data keeps surprising to the upside, the October increase happens and the pressure on borrowed positions continues. If inflation cools, the Fed pauses and that pressure eases quickly.
Part of a tracked trend
Inflation Reacceleration Reopens the Hiking Cycle
US core inflation prints keep coming in above consensus, forcing markets to price renewed Fed tightening rather than the cuts that underpinned 2025 risk-asset positioning, so each upside CPI surprise repeats the same transmission — higher front-end rates, a firmer dollar, and compressed multiples on long-duration and leveraged assets.
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