Rate Hike Fears Spark Volatility Ahead of Fed's September 16 Decision

The Federal Reserve's next policy decision on September 16 is being closely watched by markets, as it has the potential to impact Bitcoin and other risk assets. Core inflation has cooled from 4.76% to around 3%, but instead of celebrating, investors are pricing in a rate hike.

Fed funds futures currently imply a 60-66% probability of a 25 basis point increase at the September meeting. This would be the first hike since 2023 and could send shockwaves through Bitcoin and the broader crypto market.

Core CPI came in at 2.5% year-over-year in July, down from 2.59% in June. Headline CPI is around 3.4%, with easing pressures in energy and services doing most of the heavy lifting.