Fed Hike Odds Plummet as Bitcoin Breaks Above $80K
The probability of a September Federal Reserve rate hike has fallen to 50/50, down from a high of 70% just a day earlier and as low as 37% last week. This shift is reflected in the CME Group's FedWatch tool, which now shows an almost even split between holding the benchmark rate at 3.50-3.75% and lifting it a quarter point to 3.75-4.00%. The odds of a second rate hike have also been pushed back, with the timeline now pointing to March rather than December.
The volatile environment surrounding the Fed's decision is largely driven by concerns over inflation, tied to the ongoing Iran conflict and its impact on oil prices and bond yields. Bitcoin has moved in tandem with the shifting rate outlook, breaking above $80,000 this week as talk of an end to the war spread. The asset currently trades near $81,000, up roughly 5% over 24 hours.
Whether the current rally can sustain itself through the September 16 decision remains uncertain, pending further developments in the Iran situation and next inflation print.