Fed Rate Hike Fears Trigger Rare Bitcoin Rally

Market Reaction to Fed Minutes

Most Federal Reserve officials supported the September rate hike and expect another increase in 2026. The minutes highlighted concerns about inflation risks and the need for risk management. The Fed's next meeting is on October 27-28, days before the US midterm elections.

All 19 officials supported the September rate hike, while most expect another hike in 2026. Inflation risks remain tilted higher, and many saw risk-management reasons to raise rates. Several participants also expressed concerns about the scale of the artificial intelligence buildout and its impact on the economy.

Bitcoin's Exceptional Reaction

Bitcoin rose by 0.18% in the first five minutes after the release of the Fed minutes, a reaction that was not seen in the stock market or gold. The bounce followed a slide, and Bitcoin had already sold off into the release. The Fed's rate decisions have been driving crypto flows, with investors putting $3.55 billion into crypto funds in the week after the September hike.

Upcoming Events

The Fed meets next on October 27-28, days before the US midterm elections. September consumer price data, due on October 14, will be the last major inflation reading before that decision. Traders had already cut the odds of an October hike to roughly 20%, from about 55% a week earlier.