Bitcoin Price Faces Fresh Fed Risk as September Rate Hike Odds Jump Above 50%

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• Markets now price roughly a 57%–58% chance of a Federal Reserve rate hike in September, up sharply after Fed Chair Kevin Warsh’s hawkish Jackson Hole speech.

• Oil has returned above $90 for Brent, while the US Strategic Petroleum Reserve has fallen to 289.7 million barrels, its lowest since 1982, adding another inflation risk.

• CryptoQuant data show little large-scale retail buying around Bitcoin’s latest lows, which analyst Ardi argues could leave sidelined investors available to fuel another rally.

Bitcoin is heading into September with a new macro risk after traders pushed the probability of a Federal Reserve interest rate hike above 50%, reversing expectations that monetary policy would remain unchanged.

CME FedWatch pricing put the probability of a September increase at roughly 57%–58% on Aug. 31. Reuters reported that the odds had jumped from 35.4% to 55.7% following Federal Reserve Chair Kevin Warsh‘s Jackson Hole speech.

Bitcoin initially fell about 3% to below $77,000 after Warsh’s comments before recovering toward $78,000. The pullback followed an August rally from roughly $63,000 to over $80,000, leaving BTC up around 23% for the month. 

Why a September Fed Rate Hike Matters for Bitcoin

Warsh did not promise a September hike, but his inflation assessment was difficult for risk markets to ignore.

The Fed chair said annual PCE inflation remains at 3.7%, while the six-month rate is running at 4.1%. More than half of the goods and services inside the PCE basket have risen by over 3% during the past year.

His message was that inflation remains too far above the Fed’s 2% target for policymakers to assume it will simply disappear.

Higher rates typically raise yields on dollar assets and make speculative investments such as Bitcoin less attractive at the margin.

There is, however, an important counterpoint. Analysts cautioned that a 58% probability is far from a done deal, noting that probabilities around 90% are more commonly treated as near-certainty before a Fed meeting. JPMorgan still expects the next hike in December, while Barclays now forecasts 25-basis-point increases in both September and December. 

$90 Oil Adds Another Inflation Problem for Bitcoin

The Fed also has a new problem coming from energy markets.

Brent crude surged to around $91.25 per barrel on Monday, while WTI reached approximately $86.36 after renewed fighting between the US and Iran near the Strait of Hormuz.

The pressure comes with America’s emergency oil cushion already depleted. The Strategic Petroleum Reserve fell to 289.7 million barrels in the week to Aug. 21, its lowest level since November 1982.

Source: finance.yahoo.com