The Federal Reserve's decision to hold interest rates steady at 3.75% to 4% has put additional pressure on Bitcoin, according to market analysts. The Fed's vote on Wednesday was 10-2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack favoring a quarter-point increase. Fed Chair Kevin Warsh emphasized that inflation remains above the central bank’s 2% target, stating, "Americans… are still dealing with inflation that has been running above the Committee’s objective for close to 6 years."
Iggy Ioppe, chief investment officer at Theo, noted that while the rate hold was expected, investors had not fully anticipated the Fed's hawkish tone. "Markets had the hold priced, but not the hawkish tone," he said. The Fed's messaging has raised expectations of a rate hike in December, with CME FedWatch data showing a 78.4% probability of a quarter-point increase by December and a 67.3% probability of at least a quarter-point increase by March.
Bitget analyst Lewis Huang suggested that Bitcoin’s next move may depend less on the Fed’s decision and more on Treasury yields, the US dollar, and broader investor sentiment. "With limited new direction from the Fed, Bitcoin’s near-term performance may depend more heavily on Treasury yields, dollar movements and broader risk sentiment," he said.
Analysts are now looking to Thursday’s personal consumption expenditures inflation report and earnings from major technology companies for clues about the direction of risk assets. Sygnum Bank chief investment officer Fabian Dori added that "the next couple of days promise more excitement" with the release of PCE inflation data and earnings reports from various Mag 7 companies.