On October 28, the Federal Reserve decided to maintain its benchmark interest rate within the range of 3.75% to 4.00%. This decision coincides with Bitcoin trading close to $80,800, while two officials advocated for an additional quarter-point increase.
Summary
- The Fed opted to keep rates steady at 3.75%–4.00% following a quarter-point hike in September.
- Two members of the committee pushed against the pause, recommending another increase of 25 basis points.
- Bitcoin’s trading value was near $80,800, with resistance noted above $81,400 in previous assessments.
- The consumer inflation rate for September hit 3.7%, compared to 3.4% in August.
The Federal Open Market Committee reached this decision with a 10–2 majority, as detailed in their October statement. Lisa Cook and Beth Hammack were the dissenting officials advocating for higher rates.
Fed pauses interest rate adjustments post-unanimous September hike
In a statement released at 2 p.m. Eastern time, the committee characterized the economy as growing robustly, even as inflation levels remained high. They noted that consumer spending showed resilience, capital investments were strong, and unemployment rates remained relatively unchanged.
The committee indicated that further data would assist in determining the appropriate policy approach to achieve the inflation target of 2%. “The Committee is committed to ensuring price stability,” they affirmed.
The division in October occurred after a consensus decision on September 16 to increase rates by 25 basis points, which all 12 voting members endorsed, bringing the benchmark to its current range as indicated in the September statement.
The earlier official statement mentioned economic activity expanding at a “solid pace,” while the October statement upgraded this to “strong pace.” Both statements reinforced the Fed’s commitment to maintaining sufficient reserves within the banking sector.
Prior to the announcement, KPMG’s meeting preview on October 22 predicted a steady rate with an anticipated hike in December. They expected a unanimous decision, though a risk of one dissent in favor of higher rates was noted. However, the decision made on Wednesday saw two dissenters.
KPMG’s analysts suggested that pauses between quarter-point adjustments would enable policymakers to evaluate inflation rates, employment conditions, and overall financial stability. The firm highlighted the challenge of tightening policies without destabilizing markets already grappling with increased borrowing costs and higher long-term yields. Their December outlook remained speculative, not an official Fed pronouncement.
Bitcoin maintains status above $80,000 following fluctuations
As of the latest check, the market analytics from the October 28 report indicated Bitcoin priced at $80,771, reflecting a 0.47% increase over the last 24 hours. Its daily trading spectrum spanned from $80,334 to $81,636.
Earlier reports from crypto.news stated that Bitcoin had surged back above $80,000, albeit remaining under its short-term moving averages. The technical analysis revealed the nine-day average was $81,416, while the 21-day average stood at $81,905.
According to analyst Rekt Capital, the critical level for Bitcoin to reclaim was $81,400, following its loss of this support level. Recovery projections suggested targets between $82,000 and $82,500 above that threshold, with potential upward movement toward $84,202.
The same analysis identified $80,000 as immediate support, with $78,000 and $76,000 as the levels below it. These figures were derived from assessments prior to the Fed’s announcement, rather than updated trading analyses following the decision.
Focus remains on Bitcoin ETF flows and market leverage
Tim Sun, a senior researcher at HashKey Group, had previously identified U.S. Treasury yields, Bitcoin spot ETF flows, and leverage in derivatives as influential elements to monitor surrounding the Fed’s forthcoming decisions.
In remarks from September 29, Sun warned that a second rate hike could lead investors to perceive the September increase as the start of a tightening cycle. He expressed concerns that rising long-term yields and tighter liquidity might dampen demand, with leveraged positions potentially impacting Bitcoin’s market response.
Sun’s observations came before the Wednesday decision to maintain rates. He linked sustained ETF inflows to potential Bitcoin support while cautioning that excessive leverage in derivatives could leave the market vulnerable to adverse conditions.
An analysis from October 17 revealed that U.S. spot Bitcoin funds experienced a net withdrawal of $614.7 million over the first 12 trading sessions of October, as compiled by Farside Investors.
This report outlined the varied nature of individual trading sessions: with $175.7 million inflowing on October 13, followed by withdrawals totaling $261.4 million the next day. It noted that these fund-flow totals are subject to revision and may not accurately reflect the spot purchases made on those dates.
Inflation rose in September as gas prices increased
The September report from the Bureau of Labor Statistics indicated an annual consumer inflation rate of 3.7%, an increase from 3.4% in August. Consumer prices climbed by 0.6% during the month on a seasonally adjusted basis after a 0.4% increase in August.
Gas prices surged by 9.1% in September, contributing significantly to the overall increase in the headline index. Excluding food and energy costs, prices rose by 0.3% for the month and 2.6% year-on-year.
In separate projections, the Fed indicated median PCE inflation at 3.7% for 2026 and 2.3% for 2027, reflecting year-over-year changes in the fourth quarter. The September CPI data reflects changes over the previous 12 months.
The forecasts for September estimated a median federal funds rate of 4.1% for both 2026 and 2027, an increase from previous forecasts of 3.8% and 3.6% respectively. The Fed describes these figures as individual assessments of appropriate monetary policy by its participants.
The September projections estimated median real GDP growth at 2.3% in 2026, a slight increase from June’s estimate of 2.2%, with expected unemployment at 4.1%, down from 4.3%. Core PCE inflation was anticipated at 3.4%, slightly higher than the earlier forecast of 3.3%.
The October implementation update indicated that interest paid on reserve balances will remain at 3.90%, effective October 29. Standby overnight repurchase operations will continue at a rate of 4.00%, while overnight reverse repurchase operations will offer a rate of 3.75%, with a $160 billion cap per counterparty each day.