Explainer · Fed and markets

Will the Fed hike in December? What another rate rise could mean for gold and bitcoin, in plain English

By VoxTradePro Desk · Published 4 Nov 2026, 11:10 UTC+8 · 6 min read

Markets put a December Fed hike near 73%. Here is how rate rises work on gold and bitcoin, what 2022 showed, and what to watch before 9 December.

Type "will the Fed raise rates in December" into a search bar this week and you will find a market that has mostly made up its mind. CME's FedWatch tool put the odds of a quarter-point hike at the December meeting at about 73% on 3 November, CNBC reported. Business Insider cited roughly 75% the same day.

A year ago the conversation ran the other way. The Fed cut rates in September, October and December 2025, according to Macro Index's decision history. Now hikes are back, and gold and crypto traders are trying to work out what that means for them.

So here is the plain-English version: what a rate hike actually does, why gold and bitcoin both tend to wobble when one is coming, and what 2022, the last big hiking year, says about how differently the two can behave.

Where US interest rates stand right now

On 16 September 2026 the Fed raised its target range by a quarter point to 3.75%–4.00%, its first increase since 2023, in a unanimous vote, CNBC reported. The projections released that day showed 16 of 18 officials expecting another hike this year.

At the next meeting, on 28 October, it held. But the vote was 10–2, and both dissenters, Governor Lisa Cook and Cleveland Fed President Beth Hammack, wanted another quarter-point rise straight away, according to the Fed's own statement. The same statement said, flatly, that "inflation remains elevated."

The data since then has not made the case for waiting any easier. Kitco reported on 3 November that third-quarter GDP grew at a 3.4% annualised pace, September core PCE inflation was running at 3.1%, and the 10-year Treasury yield climbed to about 4.95% after strong job openings and factory orders figures.

The next decision comes on Wednesday 9 December at 2:00 pm Eastern Time, per the Fed's calendar. In Macau that is 03:00 on Thursday 10 December. It is also a meeting with fresh economic projections, which matters more than it sounds (more on that below).

Why rate hikes usually weigh on gold

Gold does not pay you anything to hold it. No coupon, no dividend. That is easy to live with when cash and bonds pay close to nothing. It is a harder sell when a two-year Treasury yields 4.58%, the level Business Insider reported on 3 November, up 1.11 percentage points since January.

Economists call this the opportunity cost. Every dollar parked in gold is a dollar not earning that yield. When the Fed signals more hikes, yields usually rise, and the bar gold has to clear rises with them.

The second channel is the dollar. Gold is priced in US dollars, so a stronger dollar makes it dearer for anyone paying in euros, rupees or yuan. The US Dollar Index was around 101 on 3 November, up about 3% this year, according to Business Insider.

The number that matters most, though, is the real yield: the interest rate after inflation. If inflation runs hot and the Fed falls behind it, real yields can drop even while headline rates go up, and that has historically been friendly to gold. If the Fed gets ahead of inflation, real yields rise and gold tends to struggle. Which of those two stories is playing out is the real question hiding behind every Fed headline.

2026 has been the struggle version. Gold was down about 29% from its January high and about 9% for the year as of 3 November, Business Insider reported, on track for its weakest year since 2015. For the day-to-day picture, see our story on gold near a one-year low and the live gold price.

Why bitcoin reacts to interest rates too

Bitcoin pays no yield either, so the same opportunity-cost logic applies. In practice, though, the stronger link is leverage.

Higher rates make borrowing more expensive. A big share of crypto trading runs on borrowed money: perpetual futures, margin accounts, funds using leverage. When funding gets pricier, or when traders face margin calls on other positions, the most volatile holdings are usually the first thing sold. For most of its life, bitcoin has been treated as one of those.

You can see the cautious mood in the fund data. US spot bitcoin ETFs lost about $1.04 billion in net outflows across 30 October and 2 November, according to a Bloomberg tally cited by Quartz. Bitcoin itself traded near $77,779 at 08:00 on 4 November, CoinMarketCap data cited by Aju Press showed. Our bitcoin ETF outflows piece has the fund-by-fund detail, and live prices are on the Bitcoin page.

What 2022 tells us, and what it doesn't

The closest recent test is 2022, when the Fed raised rates seven times and took its target range from near zero to 4.25%–4.50%, according to Morningstar's year-end review. Gold and bitcoin went very different ways:

Asset	2022 change	Source
Gold	−0.3% (closed at $1,824.02)	VanEck
Bitcoin	−64.3%	VanEck
S&P 500	−18.1%	VanEck

Gold did not have an easy year. VanEck measured a maximum drawdown of 11.3% before it clawed its way back to roughly flat. Bitcoin fell from $43,319 to $16,604, by Fox Business's count, and never really recovered within the year.

The tempting takeaway is "gold holds up when rates rise." 2026 has already broken that. Gold has fallen alongside stocks this year, which economist David Rosenberg described as "an entirely new dynamic" in comments reported by Business Insider. The more honest lesson is narrower: fast, surprising tightening tends to hit the most leveraged and speculative corners of the market first, and how much a hike hurts depends a lot on whether anyone saw it coming.

"Priced in": why a hike can move prices less than you'd expect

If the market already gives a December hike roughly three-in-four odds, much of that move is already sitting in prices. Bond yields, the dollar and futures trade on expectations, often weeks before the Fed actually votes.

That is why traders like to say the surprise matters more than the decision. Three broad outcomes are worth thinking through:

A hike with a "that's probably it" tone. Prices can bounce even on a hike day if the Fed hints it is close to done.
A hike plus a signal of more. December brings a new dot plot. A median path pointing higher into 2027 would be the hawkish surprise.
A hold. With odds near 73%, standing still would be the bigger shock, and yields could fall quickly.

None of these comes with a guaranteed reaction. Markets have a habit of doing the opposite of the textbook on the day itself, then reversing again a week later.

What to watch before 9 December

US jobs report, Friday 6 November, 08:30 ET (21:30 Macau), per the BLS schedule. A strong number keeps hike odds high.
October CPI, Tuesday 10 November, 08:30 ET (21:30 Macau). This is the inflation print the Fed will lean on most.
The 10-year Treasury yield near 4.95%. A clean break above 5% would be a psychological marker for both gold and crypto.
ETF flows in gold and bitcoin funds, as a read on whether big money is stepping back in.
Fed speeches until the blackout period begins on 28 November, per the Chicago Fed's calendar.

All the dates sit on our economic calendar. If you want to see how traders read rate-driven trends on a chart, technical indicators explained is a good starting point.

Practise a Fed day before you trade one

Fed days are among the most volatile sessions of the month. Spreads widen and prices can whip both ways within minutes of the statement. If you have never traded one, practise first. Our free Paper Trading simulator uses live crypto prices and a 10,000 virtual USDT balance, so you can test how you would react to a hike headline without risking real money.

Before any real trade, work out how much you could lose if you are wrong. Our risk management basics guide and the position size calculator cover that. For the gold side, read how to trade gold; for crypto, crypto market basics.

Frequently asked questions

Does a Fed rate hike make gold go down?

Often, but not always. Higher rates raise the opportunity cost of holding gold, which pays no interest, and tend to lift the US dollar, both of which usually weigh on the price. In 2022 the Fed hiked seven times and gold still ended the year down only about 0.3%, according to VanEck, while in 2026 gold has fallen about 9% year to date as of 3 November, per Business Insider.

How does a rate hike affect bitcoin?

Mostly through liquidity and leverage. Borrowing gets more expensive and risk appetite tends to cool, which can push leveraged traders to cut positions. In 2022, as the Fed raised rates seven times, bitcoin fell about 64%, according to VanEck and Fox Business.

When is the next Fed meeting?

The FOMC meets on 8 and 9 December 2026, according to the Federal Reserve calendar. The decision is released at 2:00 pm Eastern Time on 9 December, which is 03:00 on 10 December in Macau.

What does priced in mean for a Fed decision?

It means markets already expect the outcome, so bond yields, the dollar and asset prices have largely adjusted in advance. On 3 November, CME FedWatch put the odds of a December hike near 73%, CNBC reported, so the Fed's guidance on what comes next may move prices more than the hike itself.

Sources

Not financial advice. This article is for general information and education only. It is not a recommendation to buy, sell or hold any asset. Prices move quickly and figures quoted may already be out of date; markets involve risk, including the loss of capital. See our disclaimer.

Related markets: Gold Bitcoin Silver