Fed holds rates at 3.75%-4.00% in 10-2 vote as Bitcoin sits near $81,000
In brief
- The Federal Reserve held rates at 3.75% to 4.00% Wednesday in a 10-2 vote.
- Lisa Cook and Beth Hammack dissented, favoring another quarter-point hike.
- Bitcoin edged up about 0.2% to roughly $80,950 after the announcement, per Decrypt.
- Traders priced December hike odds above 70% before the decision, Decrypt reported.
Two dissents, down from three
Hammack isn't new to this. She also dissented in July, when the committee held rates in a 9-3 vote with Neel Kashkari and Lorie Logan also favoring a hike. Kashkari and Logan sided with the majority this time, so the number of dissents fell from three to two.
The hold itself wasn't a surprise. Before the decision, CME FedWatch had put the odds of no change at around 90%, per Decrypt. The Fed had raised the federal funds rate in September in a unanimous 12-0 vote (its first hike since 2023).
The language on growth got firmer.
“Economic activity is expanding at a strong pace,” the Fed said in its statement
That's a step up from the solid pace it cited in September. The statement also said job gains had kept pace with the workforce, the unemployment rate had changed little and inflation remained elevated.
Oil, CPI and yields
Decrypt reported that oil remained a major driver of inflation because the U.S.-Iran war had squeezed global supply, with U.S. crude settling at $99.90 a barrel on Tuesday. The Labor Department reported consumer prices rose 3.7% in the 12 months through September, with gasoline up 9.1% in the month alone, according to Decrypt. The 10-year Treasury yield closed Tuesday at 4.99% after peaking at 5.31% on Oct. 5.
Bitcoin and the December meeting
Bitcoin briefly rose above $81,600 earlier Wednesday before slipping back below a resistance zone between $81,000 and $82,500 that's capped several rally attempts this year, Decrypt reported.
December is the meeting traders are watching now.
Before the decision, traders had put the odds of another quarter-point hike at the Dec. 8-9 meeting above 70%, per Decrypt, and minutes from September's meeting showed most officials judged another increase would likely be appropriate by year-end. That's market pricing, not a commitment from the Fed.
The calendar between now and then is short: the October jobs report is scheduled for Nov. 6, October inflation data for Nov. 10, and the Fed's next meeting for Dec. 8-9, when it'll publish new economic projections. Fed Chairman Kevin Warsh was scheduled to hold a press conference at 2:30 p.m. to elaborate on Wednesday's decision.
