Fed Hawkishness Keeps Crypto Prices Grounded Despite Weaker Hike Odds

Despite a decline in interest rate hike odds to just 30%, down from 76% last month, the Federal Reserve's stance on monetary policy remains hawkish. This is keeping crypto prices in check due to unfavorable macroeconomic conditions.

The recent drop in inflation to 3.4% in July, 10 basis points below June's print, has not been enough to alleviate concerns about a potential rate hike in September. Although inflation is still 140 basis points off the Fed's target rate of 2%, the three governors who disagreed with the committee's decision to keep rates unchanged during the last FOMC meeting are keeping investors on edge.

The impact of this uncertainty is evident in the crypto market, where exchange-traded funds (ETFs) linked to Bitcoin saw $350 million in net outflows last week. This indicates that investors remain skeptical about Bitcoin's chances to rally.