August core CPI rose 0.3% month-over-month, while markets are now pricing in a greater than 90% probability of a 25-basis-point rate hike.
In my view, a 25bp hike is already largely priced in. The real question is no longer whether the Fed hikes, but what it signals afterward:
Is this a one-off defensive move, or the beginning of a longer tightening cycle?
If the Fed raises rates by 25bp but delivers a cautious message about further hikes, Bitcoin and technology stocks could see a classic “sell the rumor, buy the news” reaction. The market may sell off before the announcement and recover quickly once the uncertainty disappears.
However, if the Fed emphasizes persistent inflation and keeps the door open for additional hikes, US Treasury yields and the dollar could continue rising. That would drain liquidity from risk assets and place further downside pressure on BTC.
Gold faces a different setup. Higher rates and real yields are usually bearish for gold in the short term. But if tighter policy increases recession or financial-instability risks, safe-haven demand could return quickly. Gold may therefore fall first and then create a stronger buying opportunity.
My trading plan is simple:
I will not predict the first FOMC candle, and I will not chase the initial move.
I am watching BTC alongside the US Dollar Index and Treasury yields. I will favor a BTC LONG only if price sweeps liquidity, holds support and quickly reclaims the breakdown area. If support fails while the dollar and yields continue higher, I will reduce exposure and look for a SHORT after the retest.
For gold, I prefer waiting for a pullback instead of buying at elevated prices. A LONG setup becomes more attractive if yields cool and gold reclaims its lost support.
FOMC is not the moment to gamble. Let the market reveal its direction first—then execute with confirmation and controlled risk.
What is your base case: one hike only, or the start of a new tightening cycle?