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Key TakeawaysThe Federal Reserve unanimously raised rates by 25 basis points to 3.75%–4.00%, its first increase in three years.16 of 18 Fed officials projected at least one more rate hike in 2026, signaling continued concern over persistent inflation.Despite the hawkish September projections, softer subsequent economic data have pushed the probability of an October rate hike down to 19%.The 10-year Treasury yield rose to 5.33%, while the 30-year yield reached 5.71%.The U.S. dollar strengthened while gold fell to a two-month low, reflecting pressure from elevated yields.Federal Reserve minutes from the September meeting showed policymakers remained focused on persistent inflation even as divisions emerged over how aggressively interest rates should rise from here.The Fed unanimously increased the federal funds rate by 25 basis points to 3.75%–4.00%, marking its first rate hike in three years.Under Fed Chair Kevin Warsh, policymakers maintained a strong focus on bringing inflation under control, with 16 of 18 officials projecting at least one additional rate increase before the end of 2026.Fed Officials Divided Over Pace of TighteningThe unanimous September decision masked a broader debate over the appropriate pace of future tightening.More hawkish policymakers favored stronger action against inflation, while other officials argued for patience as economic data began showing signs of cooling.That disagreement puts incoming inflation and employment data at the center of the Fed's next decision.October Rate-Hike Odds Drop to 19%Despite the relatively hawkish September projections, markets have become substantially less convinced that another increase will arrive immediately.The September meeting occurred before more recent signs of weakness in employment data. Traders have consequently reduced the probability of another hike at the October 27–28 meeting to around 19%, making a pause the dominant market expectation.This creates a notable disconnect: Fed projections still point toward additional tightening in 2026, while markets increasingly expect the central bank to wait.Treasury Yields Rise as Dollar StrengthensBond markets remained under pressure, with the 10-year Treasury yield reaching 5.33% and the 30-year yield climbing to 5.71%.The U.S. dollar also strengthened, while gold fell to a two-month low as higher yields increased the opportunity cost of holding the non-yielding asset.For Bitcoin and other risk assets, the key question now shifts from whether the Fed remains hawkish to when — or whether — policymakers will deliver the additional rate hike projected for 2026.