Fed Rate Hike Odds Plunge as Williams Douses Speculation
New York Fed President John Williams doused speculation of an imminent rate hike by suggesting policymakers have enough time to assess new economic data. This statement sent futures markets into a sharp correction, with odds of a 25-basis-point hike in October plummeting from above 70% to around 44%. The shift could be a boon for Bitcoin and the wider crypto market.
Speaking at the University at Buffalo, Williams stated that the Fed's unanimous decision last month to raise rates to 3.75%-4% gives policymakers enough time to gather more information before making another move. He emphasized there is 'no need for urgency' and that they have time to assess new data.
This contradicts Federal Reserve Governor Michael Barr, who said the central bank has been 'knocked off course' by strong AI demand and higher oil prices. This puts Barr's view at odds with Williams', but it does not change the fact that Williams expects another hike later this year if the economy follows his forecast.
The potential rate hike slowdown could be a welcome relief for crypto, which has been struggling due to rising interest rates. The global crypto market cap stands at $2.95 trillion, with Bitcoin accounting for $1.67 trillion and a market dominance of 56.62%.