#fedoctoberratehikeoddsriseto69.7%
Expectations regarding the next steps of the United States Federal Reserve (Fed) have taken a more restrictive turn in recent hours. According to the latest data provided by the CME FedWatch tool, futures markets have quickly adjusted their projections, raising to 69.7% the probability of a new 25 basis-point increase (0.25%) in interest rates for the October meeting.
This upswing leaves only a 30.3% probability for the hypothesis of a pause that keeps the federal funds rate range at its current level of 3.75%–4.00%.
The reallocation of probabilities has immediate consequences for equities, debt markets, and cryptoassets:
Fixed Income and Bonds: Yields on 2-year U.S. Treasury notes remain elevated near 4.9%, attracting institutional capital and supporting the strength of the U.S. dollar (USD).
Cryptoassets (BTC and ETH): Although assets such as Bitcoin and Ethereum typically react in a volatile manner to reduced global liquidity, analysts note that much of the impact from the 25 bp increase may already be priced in by the markets. The key for the crypto sector will not rest solely on the October decision, but on the tone of the Fed’s forward guidance for the coming quarters.
Precious Metals: Interest-rate-sensitive commodities, such as silver and gold, are experiencing moderate downward pressure due to the higher opportunity cost of holding non-yielding assets.
$BTC
$ZEC
$BNB
Expectations regarding the next steps of the United States Federal Reserve (Fed) have taken a more restrictive turn in recent hours. According to the latest data provided by the CME FedWatch tool, futures markets have quickly adjusted their projections, raising to 69.7% the probability of a new 25 basis-point increase (0.25%) in interest rates for the October meeting.
This upswing leaves only a 30.3% probability for the hypothesis of a pause that keeps the federal funds rate range at its current level of 3.75%–4.00%.
The reallocation of probabilities has immediate consequences for equities, debt markets, and cryptoassets:
Fixed Income and Bonds: Yields on 2-year U.S. Treasury notes remain elevated near 4.9%, attracting institutional capital and supporting the strength of the U.S. dollar (USD).
Cryptoassets (BTC and ETH): Although assets such as Bitcoin and Ethereum typically react in a volatile manner to reduced global liquidity, analysts note that much of the impact from the 25 bp increase may already be priced in by the markets. The key for the crypto sector will not rest solely on the October decision, but on the tone of the Fed’s forward guidance for the coming quarters.
Precious Metals: Interest-rate-sensitive commodities, such as silver and gold, are experiencing moderate downward pressure due to the higher opportunity cost of holding non-yielding assets.
$BTC
$ZEC
$BNB
