Fed Rate Hike Odds Surge to 86.5% Amid Oil Price Spike

The cryptocurrency market is bracing for four major events in five days, but one event has already had a significant impact on market expectations. The Federal Reserve's decision to raise interest rates by 25 basis points now has an 86.5% chance of happening, up from 69.4% just last Friday.

This sudden shift in expectations is largely due to the recent spike in oil prices following attacks on Saudi infrastructure. Higher energy costs feed directly into inflation expectations, making a rate hike more likely.

The cryptocurrency market has never experienced a Federal Reserve tightening cycle as an institutional asset class before, and it's not clear how this will affect prices. However, one thing is certain: the market is watching the wrong thing. Instead of focusing on the cloture vote in the Senate or Pi Network's final planned upgrade, investors should be paying attention to the Fed's decision.

The Bank of Japan's decision on September 18 will also have a significant impact on global markets. Japanese policy has been the anchor of global carry trades for years, and when the BOJ moves, leveraged positions funded in yen get repriced, leading to potential market volatility.