Fed Rate Decision Looms Large Over Bitcoin Markets
The Federal Reserve's upcoming interest rate decision on Wednesday has sparked volatility in markets, particularly for Bitcoin. The Fed's Federal Open Market Committee (FOMC), chaired by Kevin Warsh, is expected to announce its latest decision as US bond yields spike.
US inflation pressures have reshaped expectations for Fed policy, with a 31% chance of a hike this week and a 50% chance of one in September. The CME Group's FedWatch Tool shows these rate hike odds were tempered slightly after oil prices dropped 8% on Monday due to the US-Iran conflict pause.
Markets are also awaiting the release of June Personal Consumption Expenditures (PCE) inflation data, which is expected to be moderately lower than May's 4.1% year-on-year tally. The current PCE inflation rate sits at a three-year high.
The correlation between Bitcoin and equities remains absent on higher timeframes, but bearish geopolitical and macro events could make the two asset classes move in lockstep again.