#Gate广场中秋团圆局

‍#每周来晒

‍# The Fed’s First 25-Basis-Point Rate Hike in Three Years
“The shoe has dropped”—here are the key points to watch! How will the market move?

Only halfway through this week, and it has already become a major reality check: those who believed “with Trump in office, the CLARITY Act will definitely pass this year” saw the Senate block it first; those who believed “the Fed cannot possibly hike rates this year” have now seen not only a hike, but potentially more than one. To avoid being misled and embarrassed again, let’s break down the hidden messages behind this rate hike and its potential impact on the market.

Understanding this rate hike is not just about the 25 bp. These pieces of information deserve more attention:

1. Unanimous approval, with unprecedented internal consensus

With 12 votes in favor and 0 against, this is not common among FOMC decisions in recent years. At the July meeting, only 3 voting members supported a rate hike, while this time everyone was in agreement, indicating that persistent inflation has pushed the Fed internally from disagreement toward consensus. Waller reiterated at the press conference that “inflation is too high and has lasted too long,” setting an extremely hawkish tone. Unanimous approval also means that internal resistance to subsequent rate hikes has fallen sharply, strengthening the likelihood of another hike in November or December.

2. The dot plot moves sharply higher: another rate hike is highly likely this year

This was the most unexpected part of the meeting. Among the 18 officials who submitted projections (Waller continued the June practice of not submitting a dot plot):

12 expect another 25 bp rate hike this year

4 expect two more rate hikes this year (bringing the total for the year to 75 bp)

2 expect no further rate hikes after September

None expect a rate cut this year

The median forecast for the federal funds rate at the end of 2026 rose sharply from 3.75% in June to 4.1%, corresponding to a target range of 4.00%–4.25%. In other words, the Fed’s official guidance is now clear: the September hike is not the end, and at least one more hike is on the way this year. Compared with the June dot plot, when only 6 officials expected at least two rate hikes for the full year, the hawkish camp has shifted from a minority to an absolute majority.

3. No rate cuts in 2027: high rates will remain in place for longer

The dot plot shows the median rate for 2027 remaining at 4.1%, unchanged from the end of 2026, implying no rate cuts throughout next year. This completely shatters the market’s previous fantasy of “a quick pivot to rate cuts after the hikes.” The signal from the Fed is extremely clear: this is not a preventive “insurance hike,” but a tightening cycle that could last until 2027. The high-rate environment is likely to last much longer than the market had previously priced in.

4. Inflation forecasts raised, while economic growth remains robust

The SEP economic projections show PCE inflation at around 3.7% by the end of 2026, well above the 2% target, with the timeline for inflation returning to 2% pushed back further. At the same time, the Fed believes economic activity is still “expanding solidly,” with no signs of a recession caused by rate hikes. Stubborn inflation plus a resilient economy is precisely what gives the Fed the confidence to continue hiking, and it is also the combination that worries the market most—meaning rate hikes will not end early because of economic weakness.

5. Waller does not submit a dot plot, preserving policy flexibility

Waller has declined to submit his personal rate forecast at two consecutive meetings, a detail worth noting. As chair, by not putting his own dot on the table, he retains room to adjust his stance at any time as the data change, without being constrained by his earlier forecasts. This can be interpreted as pragmatism (data dependence), but also as unpredictability—the market cannot anchor the policy path using his dot plot, causing the uncertainty premium to rise instead.

How will this rate hike affect foreign exchange, U.S. stocks, gold, and crypto?

1.Foreign exchange: The dollar returns to strength, while non-U.S. currencies come under pressure

The U.S. Dollar Index quickly broke above the 100 mark after the decision, reaching 100.25, up 0.57% on the day; USD/JPY was pushed above 156. The logic is straightforward: Fed rate hikes + a hawkish dot plot + no rate cuts in 2027 have widened the U.S. rate differential again, strengthening the dollar’s yield advantage.

Short term: The dollar may see brief profit-taking after the hike is implemented, but its medium-term strength remains intact.

Medium term: As long as the Fed maintains its “higher for longer” stance, the dollar will have fundamental support. Non-U.S. currencies, especially the yen and yuan, face continued depreciation pressure, and the possibility of intervention by the Bank of Japan in the foreign exchange market should be monitored.

Watch: 100 is an important psychological level for the U.S. Dollar Index. A sustained move above it would open up further upside; a drop back below 99 would undermine the bullish narrative.

2.Gold: Under pressure in the short term, but the medium-term logic remains intact

Gold was one of the assets that reacted most sharply to this decision. Spot gold in London briefly surged to $4,368 before the decision, then quickly plunged after its release. New York gold futures were quoted at $4,328.9, down 1.34%, after touching an intraday low of $4,294.

The short-term bearish logic is clear: rate hikes push up real yields, increasing the opportunity cost of holding gold; a stronger dollar also puts pressure on gold, which is priced in dollars. The 2-year U.S. Treasury yield rose to 4.712%, its highest level since July 2024, and rising real yields directly weigh on gold.

But there is no need to be overly pessimistic in the medium term:

Historically, gold rose in three of the five rate-hiking cycles and fell in two, with an average gain of 15.8%. The key factor is real rates rather than nominal rates;

The Fed’s higher inflation forecast means inflation expectations could rise faster than nominal rates, so real rates may not continue rising;

Long-term supporting factors such as global geopolitical risks, central-bank gold purchases, and dedollarization remain unchanged.

Assessment: The $4,250–$4,300 range is an important short-term support zone. If it holds, gold may stabilize and rebound; if it decisively breaks below $4,250, it could fall further toward $4,100. In the medium term, amid the tug-of-war between high inflation and high rates, gold will likely remain in a broad range rather than fall unilaterally.

3.U.S. stocks: Sector divergence, with tech holding up and cyclicals under pressure

All three major U.S. stock indexes closed lower, but divergence was clear: the Dow fell 1.21% to a new closing low since mid-June, the S&P 500 fell 0.44%, and the Nasdaq was virtually flat, down 0.01%. Technology stocks showed strong resilience, with Intel gaining more than 4% and SK hynix edging higher.

The logic behind the divergence:

Traditional cyclical, financial, and industrial stocks represented by the Dow are more sensitive to interest rates. Rate hikes directly suppress valuations and earnings expectations, resulting in the largest decline;

Leading Nasdaq technology stocks have AI narratives, robust cash flow, and a high proportion of overseas revenue (a stronger dollar can instead generate foreign-exchange gains), while the market had already priced in the rate hike extensively, allowing them to hold up better;

However, caution is warranted: if there is another hike in November and high rates persist through 2027, the high valuations of technology stocks will eventually face pressure from rising discount rates, though the transmission will be delayed.

Assessment:

Short term: Your assessment is correct—the rate-hike uncertainty has been removed, and after the hike takes effect, short-term bearish pressure has been cleared. Technology stocks may lead the broader market in a technical rebound. However, the rebound will be limited because the additional hawkish information in the dot plot has not yet been fully digested.

Medium term: The market will likely enter a period of consolidation. The upside is capped by the pressure of “another rate hike this year,” while the downside is supported by a resilient economy and AI industry trends, resulting in a tug-of-war between bulls and bears. The divergence between a weaker Dow and a stronger Nasdaq is likely to continue.

Strategy: Do not chase rallies or blindly buy the dip; wait for clear signals. Technology stocks can be accumulated in batches when they pull back to key support levels, while cyclical stocks should be avoided for now.

4.Cryptocurrency: Unfazed by bearish news, with an encouraging outlook

Cryptocurrencies were hit by two major pieces of bad news this week—the failure of the CLARITY Act and the Fed’s rate hike—but after Bitcoin pulled back to 75000, it refused to fall again and showed considerable strength, once again validating Xiaocaishen’s bull-market-rebound assessment. With short-term bearish pressure exhausted, a rebound window is opening, although gains may not be very large without external positive catalysts. The rebound target is around 80000.

Finally, I want to say this: This rate hike is not the end, but the starting point of a new tightening cycle. After the Fed clearly signals “another rate hike this year + no rate cuts in 2027,” the market needs time to reprice the “higher for longer” rate environment. Therefore, for the market, this is a medium-term bearish factor rather than a sudden short-term “black swan.” The better scenario from here is consolidation after a rebound; the more pessimistic scenario is weakness across markets other than crypto. Therefore, controlling position sizes, preserving capital, and waiting for inflation data to guide expectations ahead of the November meeting is currently the most prudent strategy.