Fed to hike rates by 25 basis points after August inflation rose 0.3% core
Investors expect the Federal Reserve to raise interest rates on Wednesday following data showing core inflation increased more than anticipated.
The Federal Reserve is scheduled to implement a 25 basis point interest rate increase during its two-day meeting ending on Wednesday. This decision follows August data where the core Consumer Price Index, excluding volatile food and energy items, rose 0.3%, exceeding expectations. Alicia Levine, chief investment officer at BNY Wealth, noted that market attention now focuses on the September meeting following the recent hawkish tone from Fed Chair Kevin Warsh.
Rising rates threaten to complicate a U.S. stock market rally that has climbed nearly 12% in 2026. Higher borrowing costs could strain consumer and corporate spending while increased Treasury yields might divert capital from equities to bonds. In parallel, Bitcoin traded at $77,267 after pulling back from $78,000 due to profit-taking and leverage adjustments.
Bitcoin fell 2.9% over the past week but remains above its 200-week moving average. Nischal Shetty, founder of WazirX, stated market sentiment stays in Greed territory as sticky inflation limits the Fed's ability to cut rates further. Major altcoins mixed significantly; BNB rallied 2% while Ethereum rose 2.1% to trade near $2,521.
