Central Bank Week Ahead: The Fed Stands Pat, So Why Does the Dollar Keep Getting Stronger? What Is Bitcoin Waiting For?
Global central banks are set to make a flurry of statements next week. The Fed is widely expected to hold steady in October, with markets putting the odds at around 80%. However, officials including Waller have made clear that there is still room for rate hikes this year, making December the key turning point. Wall Street’s core bullish argument for the dollar is its interest-rate advantage: JPMorgan notes that “other central banks can’t keep pace with the Fed.” The US real interest rate differential continues to support the dollar. The dollar index has risen for four consecutive weeks, gaining nearly 3% in total—its longest winning streak since early 2025.
Bitcoin came under clear pressure this week, retreating from $87,000 to around $82,000, with a weekly loss of nearly 3%. Elevated long-term US Treasury yields and rising oil prices continued to weigh on risk assets. The key variable is September’s CPI report on October 14: headline inflation is expected to jump to 3.7%, while core CPI may slow to 0.24% month over month, supporting a Fed pause in October. If CPI comes in above expectations, the dollar and Treasury yields could strengthen further, putting short-term pressure on BTC. If core inflation is moderate, a recovery in risk appetite could open a window for a rebound in the crypto market. $BTC $ETH $ZEC
Global central banks are set to make a flurry of statements next week. The Fed is widely expected to hold steady in October, with markets putting the odds at around 80%. However, officials including Waller have made clear that there is still room for rate hikes this year, making December the key turning point. Wall Street’s core bullish argument for the dollar is its interest-rate advantage: JPMorgan notes that “other central banks can’t keep pace with the Fed.” The US real interest rate differential continues to support the dollar. The dollar index has risen for four consecutive weeks, gaining nearly 3% in total—its longest winning streak since early 2025.
Bitcoin came under clear pressure this week, retreating from $87,000 to around $82,000, with a weekly loss of nearly 3%. Elevated long-term US Treasury yields and rising oil prices continued to weigh on risk assets. The key variable is September’s CPI report on October 14: headline inflation is expected to jump to 3.7%, while core CPI may slow to 0.24% month over month, supporting a Fed pause in October. If CPI comes in above expectations, the dollar and Treasury yields could strengthen further, putting short-term pressure on BTC. If core inflation is moderate, a recovery in risk appetite could open a window for a rebound in the crypto market. $BTC $ETH $ZEC