The Federal Reserve’s first rate hike in three years: it added 25 basis points, pushing the target range to 3.75% to 4.00%. All 12 voting members approved it unanimously. But what’s really worth looking at today isn’t that—after the hike takes effect, crypto spot hasn’t moved much, while crypto stocks have all fallen flat.
Three signals that are being misread.
BTC stays near $76,000. At the same time, Coinbase is down more than 4%, Circle down more than 6%, and Robinhood down more than 5%. Circle only just launched its Arc mainnet the day before; among the founders’ validator list are BlackRock, DTCC, Visa, Mastercard, ICE, and Standard Chartered. As for the spot ETFs, on September 15 there was a net outflow of about $450 million, and on the 16th another outflow of about $405 million. The backdrop is that a procedural vote on a Senate bill regarding crypto market structure failed to clear the 60-vote threshold. Many people read this as the catalyst being gone and institutions pulling back. I don’t see it that way. What’s being withdrawn is equity, not assets. The 2-year U.S. Treasury yield rose 7.31 basis points to 4.7359%, the highest level since 2024. The 10-year yield is above 5.02%. This lifts the denominator for high-duration growth stocks—an item that has nothing to do with on-chain demand. The market now only recognizes the denominator, not the numerator.
The second one. When people read the dot plot, they interpret it as adding at most one more time within the year: of the 18 officials, 12 are expected to add at least one more, and 4 are expected to add two more. But in the same set of materials there’s a detail not much attention is paid to: Wash again refused to fill in his own rate forecast for the second consecutive time—of the 19 dots, he only filled 18. By common sense, the dot plot is the official upper limit on the path—so I actually think it’s the floor. The 10-year has already broken 5%, and the long-end is running steeper than the dot plot. Traders are betting there are still three hikes before mid-next year. But I’ll leave some room on this: for within the year, I see two interpretations—one says 4.1%, and another says end-of-year falls between 4.00% and 4.25%. That’s a full 25-basis-point gap. I’m not sure which version will be the final published one, so in the main text I only state the direction and don’t quote that decimal.
Third is gold. After the decision, spot gold briefly dropped about 3% from its intraday high, falling to the lowest since early August, closing around $4,264. Add to that the simultaneous escalation in conflict between Saudi and the Houthis, and the fact that Mecca’s first-ever air-raid alerts in nine years were sounded. The mainstream read in the market is that safe-haven demand is easing and geopolitics is calming. But geopolitics hasn’t calmed. Oil has only come down a bit from its highs. My preferred explanation is that safe-haven demand hasn’t left—it’s the opportunity cost of holding gold that’s keeping it down. Real interest rates are rising. Gold doesn’t pay yield. Geopolitical risk premium is the numerator, and real interest rate is the denominator—today the denominator won.
The next 72 hours—everything in Beijing time.
Tonight 17:00, the euro area Aug CPI final; prior 3.3, and the expectation is also 3.3—just take a look. Tonight 19:00, the Bank of England interest rate decision and meeting minutes. The benchmark rate is 3.75%; last time it was 6-3 to hold. LSEG data shows the probability of a rate hike given by Monday was about 30%, versus under 10% a week ago. Staying put is the baseline case, but the ballot wording and language matter more than the rate itself. Tonight 20:30, US initial jobless claims, Aug housing starts and building permits, and the Sep Philadelphia Fed manufacturing index. Tonight 22:00, US Aug existing home contract sales.
After that, it’s a lull. The window between the rate hike landing on Sep 29 and JOLTS is basically light on first-tier data; the next FOMC is not until Oct 27-28. During these roughly two and a half weeks of vacuum, prices are driven by positioning and headlines—the noise is the most expensive.
Three things you can ignore today.
Wassh opened a roughly 30-minute press conference, one of the shortest ever, and refused to provide any forward guidance. This will definitely be trending today, but it’s a communications-style topic, not something tradable. Saudi said that within a few days, they’ll restore about half capacity on the key oil-export pipeline—headline bait; prices have already priced it in. Trump asked to cut rates to below 1%, and the White House said this hike is quite regrettable—these kinds of statements can’t change the voting structure.
It’s a choose-one-of-two situation—this round is about the denominator or the numerator. I lean toward the denominator: interest rates and liquidity are what drive pricing, and on-chain demand hasn’t broken down. But the fact that ETFs saw two consecutive days of large outflows makes me less confident. If it’s still flowing out next week, I’ll have to change my tune. Which side are you on?