Federal Reserve Raises Interest Rates for First Time Since 2023

WHY IT MATTERS

The Federal Reserve is the central bank of the United States, and it sets interest rates that affect borrowing costs across the economy. Think of interest rates like the price of borrowing money — when rates go up, loans for houses, cars, and businesses get more expensive. This matters for crypto because higher rates tend to make traditional savings and bonds more attractive compared to riskier investments like Bitcoin. When rates were being cut, many investors moved money into riskier assets. A rate hike reverses that dynamic, at least in theory. The fact that Bitcoin spiked rather than dropped shows that crypto markets can behave unpredictably and do not always follow textbook economic logic.