The U.S. Federal Reserve raised its benchmark fed funds rate by 25 basis points to a target range of 4.75%-5%, in line with most market participants' expectations.
The price of bitcoin () rose about $250 to $28,700 in the immediate aftermath of the decision.
In its statement accompanying the rate hike Wednesday afternoon, the Fed's Federal Open Market Committee (FOMC) acknowledged this month's bank system troubles, saying that "recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation."
As recently as two weeks ago, interest rate traders were evenly split on whether the Fed would raise rates by 25 or 50 basis points. Struggles within the banking system since – including the failure of a number of lenders – had traders today roughly evenly split on whether the Fed would raise by 25 basis points or stand pat, with some participants even expecting a surprise rate cut from the central bank.
quarterly expectations of Fed members shows the median anticipated terminal fed funds rate remains at 5.1%. Participants see December 2023 core PCE inflation at 3.6% versus 3.5% expected three months earlier.
Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET.
