THE FED DECISION IS HOURS AWAY, AND GLOBAL MARKETS ARE ALREADY BRACING FOR A MAJOR VOLATILITY EVENT.
The September FOMC meeting concludes today, September 16. The policy statement is scheduled for 2:00 p.m. ET, followed by the Fed press conference at 2:30 p.m. ET.
Inflation has put the Fed back under pressure. Official BLS data shows headline CPI increased 0.4% month-over-month in August and 3.4% year-over-year. Core CPI, excluding food and energy, rose 0.3% for the month.
Market expectations have shifted aggressively. CME FedWatch pricing showed roughly a 92% implied probability of a 25-basis-point hike ahead of today’s decision, up sharply from around 59% one week earlier.
The pressure is already visible across markets. The U.S. 10-year Treasury yield briefly crossed 5% on Tuesday, while Wall Street fell for a second consecutive session. Bitcoin was trading around $75.9K during Wednesday’s Asian session.
For BTC, the immediate battle could come down to liquidity and yields. A hike combined with hawkish guidance could keep yields and the dollar elevated, creating another headwind for risk assets. A hike accompanied by softer guidance on additional increases could produce a very different reaction.
Tech stocks face a similar setup. Higher rates raise discount rates on future earnings, making long-duration growth assets particularly sensitive to the Fed’s message. Nasdaq futures had already been under pressure as Treasury yields climbed.
Gold is another market to watch closely. Recent dollar strength and rising rate expectations have pressured precious metals; CME reported gold and several other metals falling more than 2% as markets repriced toward a September hike.
The 25bp decision itself may not be the biggest surprise anymore. With markets heavily pricing it in, the real volatility trigger could be what the Fed signals about October, December and the possibility of a longer hiking cycle.
For my setup, I would avoid treating the first BTC move.
Today isn’t only about whether rates rise.
It’s about what comes next.
#FedRateWatch .
The September FOMC meeting concludes today, September 16. The policy statement is scheduled for 2:00 p.m. ET, followed by the Fed press conference at 2:30 p.m. ET.
Inflation has put the Fed back under pressure. Official BLS data shows headline CPI increased 0.4% month-over-month in August and 3.4% year-over-year. Core CPI, excluding food and energy, rose 0.3% for the month.
Market expectations have shifted aggressively. CME FedWatch pricing showed roughly a 92% implied probability of a 25-basis-point hike ahead of today’s decision, up sharply from around 59% one week earlier.
The pressure is already visible across markets. The U.S. 10-year Treasury yield briefly crossed 5% on Tuesday, while Wall Street fell for a second consecutive session. Bitcoin was trading around $75.9K during Wednesday’s Asian session.
For BTC, the immediate battle could come down to liquidity and yields. A hike combined with hawkish guidance could keep yields and the dollar elevated, creating another headwind for risk assets. A hike accompanied by softer guidance on additional increases could produce a very different reaction.
Tech stocks face a similar setup. Higher rates raise discount rates on future earnings, making long-duration growth assets particularly sensitive to the Fed’s message. Nasdaq futures had already been under pressure as Treasury yields climbed.
Gold is another market to watch closely. Recent dollar strength and rising rate expectations have pressured precious metals; CME reported gold and several other metals falling more than 2% as markets repriced toward a September hike.
The 25bp decision itself may not be the biggest surprise anymore. With markets heavily pricing it in, the real volatility trigger could be what the Fed signals about October, December and the possibility of a longer hiking cycle.
For my setup, I would avoid treating the first BTC move.
Today isn’t only about whether rates rise.
It’s about what comes next.
#FedRateWatch .
