Bitunix Analyst:The Fed's First Hike in Three Years—the Real Change Is a"Higher for Longer"Policy Repricing

BlockBeats news, September 17—The Fed announced a 25-basis-point hike to a 3.75%–4% target range—its first rate increase since July 2023—with all 12 voting officials unanimously in support. More noteworthy is the policy path: of the 18 officials who submitted dots, 16 believe at least one more hike will be needed this year, while the median expectation for the year-end 2026 rate has risen to 4.1%. This indicates that the Fed is actively reassessing the neutral rate and the degree of policy restrictiveness required to bring inflation under control.

The key to this decision was not simply a response to oil prices—it was that the conditions previously supporting an "insurance rate cut" have not fully materialized. The labor market has not deteriorated as rapidly as expected, economic activity remains resilient, and productivity and capital investment have stayed strong. Yet inflation has failed to show clear improvement since mid-2025. With energy shocks, tariffs, and AI capex simultaneously driving both demand and costs higher, the Fed is no longer confronting a one-off supply shock—it is confronting how to prevent high inflation expectations from re-anchoring.

This also explains why long-dated Treasuries have not truly been relieved by the hike landing. The 10-year yield has recently approached 5%, and the 30-year is above 5.3%, reflecting simultaneous market repricing of inflation, fiscal financing, and AI infrastructure capital demand. The Fed can directly control the policy rate, but long-end yields are still determined jointly by growth, inflation expectations, Treasury supply, and term premium. A single 25-basis-point hike therefore does not end long-bond pressure—it may in fact mark the starting point for the long end to seek a new equilibrium.

In the near term, global bond markets have caught a temporary breather following the hike—but this looks more like a repricing after policy has landed than a disappearance of interest-rate risk. Equities remain supported by corporate earnings and AI capex, but if the duration of high rates is extended further, valuation and funding cost pressure will gradually transmit through. What markets truly need to observe ahead is no longer whether the Fed hikes—it is how long inflation will need to return to 2%, and whether the Fed will need to maintain higher real rates to rebuild confidence in the inflation deceleration.