Daily News 19

Tag: Federal Reserve rate hike

  • Jim Cramer’s Top 10 Stock Market Things to Watch Tuesday

    Jim Cramer’s Top 10 Stock Market Things to Watch Tuesday

    Wall Street Faces Mixed Open as Inflation Data and AI Developments Drive Focus

    U.S. stock futures pointed to a mixed start Tuesday, with S&P 500 futures edging lower while Nasdaq futures climbed. Treasury yields pulled back from morning highs, offering equities some breathing room. Meanwhile, Brent crude surpassed $99 a barrel amid renewed Middle East conflict over the long holiday weekend, lifting oil prices.

    August Inflation Report and Fed Rate Expectations

    This week’s August inflation data carries significant implications for the Federal Reserve’s next policy move. Following Friday’s robust jobs report, traders now see a 60% probability of a rate hike at next week’s FOMC meeting, according to the CME Group’s FedWatch tool. Apple’s iPhone launch event is scheduled for tomorrow, and the CNBC Investing Club will hold its September Monthly Meeting for subscribers at noon ET Thursday.

    OpenAI’s Astra Model Sparks AI Hardware Optimism

    OpenAI’s new Astra model is generating significant buzz. Ben Reitzes of Melius Research said it shows “OpenAI is so back,” a development expected to support the AI chip and hardware trade. Nvidia CEO Jensen Huang posted on X that Astra was trained on 100,000 Grace Blackwell GPUs, adding: “400K GPUS coming online next,” he wrote.

    Intel Plans CPU Price Hike as Turnaround Gains Traction

    Intel, a Charitable Trust holding, is expected to raise CPU prices by another 10% this fall, according to Taiwan’s DigiTimes, aiming to improve gross margins rather than gain market share. Shares rose nearly 5% in premarket trading. Northland Securities upgraded Intel to buy from hold, citing material progress in its turnaround and the national security importance of Intel Foundry.

    Refiners See Massive Price Target Increases on Record Margins

    UBS significantly raised price targets for major refiners: Marathon Petroleum to $405 from $321, Phillips 66 to $300 from $235, and Valero to $450 from $355, while reiterating buy ratings on all three. The sector remains among the market’s hottest, driven by elevated refining margins. Diesel crack spreads, a key profitability gauge, hit an all-time high last week.

    Citi Upgrades Old Dominion and C.H. Robinson on Freight Cycle Inflection

    Citi upgraded trucker Old Dominion Freight Line and freight broker C.H. Robinson to buy from hold after a summer decline created what analysts called “quality at a reasonable price.” They argued the freight cycle inflection remains on track, which bodes well for Charitable Trust holding FedEx Freight.

    JPMorgan Initiates FedEx Freight Coverage with Buy Rating

    JPMorgan initiated coverage of FedEx Freight with a buy rating and $160 price target. The thesis aligns with the Club’s view following the spin-off from FedEx Corp: as a standalone entity, FDXF can improve profitability and service quality through self-help initiatives. While the stock has been sluggish post-spin, these are not overnight fixes.

    Pivotal Research Starts SpaceX Coverage, Highlights Starship Importance

    Pivotal Research initiated coverage of SpaceX with a buy rating and $220 price target. Analysts argued that for SpaceX to be a successful investment, the company must nail development of the reusable Starship rocket. Positive research flow mitigates concerns about additional shares entering the market from expiring IPO lockups.

    Stifel Raises Hinge Health Target After Management Meeting

    Stifel increased its price target on Hinge Health to $115 from $96, maintaining a buy rating after meeting with management. The digital physical therapy platform, with broader healthcare ambitions, has surged 47% in three months and nearly doubled year-to-date. CEO Daniel Perez presented a compelling story on “Mad Money” in May.

    UBS Upgrades Eaton on AI-Driven Electrical Demand and Data Center Expansion

    UBS upgraded Eaton, a Charitable Trust name, to buy from hold. Analysts cited improving margins ahead due to proactive pricing and better execution. Strong demand for Eaton’s electrical equipment continues, fueled by the AI infrastructure buildout. The recent acquisition of liquid cooling provider Boyd Thermal makes Eaton a more well-rounded data center supplier, as detailed for Club members last week.

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  • Bitcoin Enters ‘Rektember’ as Rate-Hike Risk and Seasonal Trends Threaten Rally

    Bitcoin Enters ‘Rektember’ as Rate-Hike Risk and Seasonal Trends Threaten Rally

    Bitcoin started September on a weaker note, falling 1% to below $78,000 as the cryptocurrency entered what is commonly called “Rektember.” Since 2013, September has been Bitcoin’s worst-performing month on average, with an average decline of about 3% and only five positive monthly returns.

    Recent performance offers some encouragement for Bitcoin bulls. The cryptocurrency has gained in each of the past three Septembers, while BTC surged 25% in August—its strongest monthly performance since November 2024. After that rally, the market may be due for a period of consolidation or a potential correction.

    Macro headwinds weigh on Bitcoin

    The broader macroeconomic environment is also creating pressure for risk assets. Fed Chair Kevin Warsh’s hawkish speech at Jackson Hole last Friday, which emphasized elevated inflation, helped trigger a global bond sell-off. Several sovereign bond yields have reached new cycle highs, while the U.S. 10-year Treasury yield climbed to 4.784%.

    Markets are now pricing in a 66% probability of a 25-basis-point rate hike at the Federal Reserve’s Sept. 16 meeting, followed by the possibility of another increase before the end of the year. Such moves would bring the federal funds target range to 4.00-4.25% by the close of 2026.

    Source: cryptonews.net

  • Bitcoin Needs Sustained ETF Demand as Fed Rate Hike Risks Grow, Analysts Say

    Bitcoin Needs Sustained ETF Demand as Fed Rate Hike Risks Grow, Analysts Say

    Bitcoin’s August rally is facing a tougher test as investors assess whether sustained spot exchange-traded fund (ETF) demand can offset rising expectations of a September Federal Reserve rate hike.

    Bitfinex analysts said in an Aug. 31 market report shared with crypto.news that Bitcoin’s latest advance has increasingly been driven by spot buying rather than excessive leverage. That could leave the market better positioned to absorb selling even as U.S. monetary conditions become less supportive.

    Bitcoin ($BTC) was trading near $78,700 at the time of writing, down about 0.4% over 24 hours, according to crypto.news data. The cryptocurrency briefly climbed above $81,000 last week before falling to $76,857 after Federal Reserve Chair Kevin Warsh used his Jackson Hole address to signal that interest rates may still need to rise.

    The decline interrupted a rally that lifted Bitcoin from below $65,000 in mid-August to above $80,000. As previously reported by crypto.news, Bitcoin gained about 24% during the preceding week as Treasury buybacks, ETF demand and forced short covering fueled the recovery.

    Bitcoin ETF demand faces a tougher test

    Bitfinex analysts said the derivatives market has not displayed the rapid leverage buildup typically associated with an overheated rally. Bitcoin open interest stood at $55.6 billion, more than 20% above its level at the start of August, but the increase has been gradual and basis levels have remained relatively low.

    “We are in a market driven by spot buying and, notwithstanding large short liquidations, open interest has only gradually increased, while basis has remained relatively low and at healthy levels historically,” the analysts said.

    According to the report, Bitcoin holding the $77,100 level, which Bitfinex identified as important lower-timeframe support, alongside continued spot buying would suggest that market conditions remain relatively balanced.

    ETF flows offer another indication of whether that demand can continue. U.S. spot Bitcoin ETFs absorbed about $3.04 billion during nine consecutive positive sessions from Aug. 17 through Aug. 27, according to Bitfinex. Friday marked the first net outflow in 10 sessions, with investors withdrawing $201.9 million as Bitcoin reversed from above $81,000.

    Despite those redemptions, the funds recorded $924.5 million in net inflows for the week. Inflows over the preceding two weeks totaled about $2.8 billion.

    BlackRock’s IBIT accounted for just $33.4 million of Friday’s withdrawals after attracting roughly $2.3 billion during the previous nine sessions. ARKB and BITB recorded a combined $164.6 million in outflows.

    Institutional demand has also absorbed Bitcoin sold by larger holders, Bitfinex said. Whale addresses holding between 1,000 and 10,000 $BTC reduced their balances by 50,500 $BTC since the end of June, while institutional custodial holdings associated with exchanges and ETF platforms increased by 59,100 $BTC.

    During the latest August advance, custodial balances rose by 31,500 $BTC, closely tracking ETF inflows, according to the analysts.

    “While whales took profits during the rally, institutional demand absorbed that supply, indicating that assets moving into these regulated vehicles may be less prone to sudden liquidation on the basis of short-term macroeconomic news.”

    $80K–$83K could test the strength of real demand

    Jeff Ko, chief analyst at CoinEx, told crypto.news that part of Bitcoin’s August rally resulted from Treasury buybacks pushing yields and the dollar lower while traders held large short positions.

    Ko said the mechanical portion of the resulting short squeeze has now “largely played out,” making spot demand increasingly important around $80,000.

    “Treasury buybacks pushed yields and the dollar lower, and that impulse collided with crowded short positioning to produce the squeeze,” Ko said. “What matters from here is whether spot buyers keep absorbing supply around $80K.”

    The Treasury catalyst had already produced a sharp market response earlier in August. On Aug. 19, the department announced that it would at least double the maximum size of liquidity-support buybacks for 10-to-20-year and 20-to-30-year nominal coupon securities from $2 billion to at least $4 billion per operation from Sept. 9 through Nov. 4.

    The change helped compress long-term yields as Bitcoin surged. An Aug. 20 analysis of the buybacks found that $BTC rose 8.2% from an intraday low of $64,100 to $69,500 within 12 hours of the Treasury announcement, while $1.44 billion in short positions were liquidated.

    Ko views the $80,000–$83,000 range as more than a technical resistance zone. The area could reveal whether new investment can replace the buying pressure previously generated by forced short covering.

    “It is a major supply zone, and the point at which the rally stops being a short squeeze and becomes a test of real capital allocation.”

    Ether could provide another signal of broader cryptocurrency risk appetite. Ko said ETH traded near $2,490 heading into Jackson Hole but subsequently lagged Bitcoin in price performance. If Treasury yields and the dollar remain elevated while Ether begins outperforming Bitcoin in both price and investment flows, he would view that as evidence of stronger crypto demand.

    Bitfinex also identified Ether ETFs as a potential demand gauge. U.S. spot Ether products attracted $815.7 million last week, extending their positive streak to 10 sessions, according to the firm. Nearly 12.3% of cumulative Ether ETF inflows since launch arrived during August, while demand adjusted for the relative size of the assets was roughly four times stronger than Bitcoin ETF demand during the past week.

    Fed rate hike risk threatens Bitcoin’s liquidity support

    Bitcoin is now facing pressure from a less favorable interest-rate outlook. Warsh’s Jackson Hole remarks lifted the market-implied probability of a September rate increase to about 57%, according to Bitfinex.

    Ko said CME-implied odds rose from 39.9% on Aug. 21 to 57% following the speech. The two-year Treasury yield moved to around 4.31%, while the dollar returned toward a two-week high.

    Bitfinex analysts said persistent inflation remains a key obstacle to easier monetary policy. Headline Personal Consumption Expenditures inflation stood at 3.7%, with core inflation at 3.3%, while private domestic demand expanded at a 4.2% annualized pace during the second quarter.

    Jeff Mei, chief operating officer of BTSE, told crypto.news that Warsh’s speech raised the hurdle for Bitcoin because higher interest rates could reduce the liquidity available to cryptocurrency assets.

    “For a sustained rally, we need a few things to happen. First, ETF demand has to stay strong across all ETF products, and not just BlackRock’s IBIT ETF. Second, we need better inflation data for the Fed to back off and keep rates steady.”

    Mei also warned that the boost from Treasury buybacks could fade quickly. Earlier in August, Bitcoin broke above $76,000 as ETF inflows accelerated alongside improving U.S. liquidity conditions. Spot Bitcoin ETFs attracted $606 million on Aug. 20 alone, extending the institutional demand that accompanied the recovery from mid-August lows.

    U.S. economic data could shape Bitcoin’s next move

    Market attention is turning to a series of U.S. economic releases that could change interest-rate expectations before the Federal Reserve’s September meeting.

    Ko identified Friday’s August payroll report as the most important immediate event and the final jobs report before the FOMC decision. July payrolls fell by 23,000 compared with an 80,000 consensus estimate, while May and June payrolls were revised lower by a combined 103,000 jobs, according to figures cited by Ko. The unemployment rate currently stands at 4.1%.

    Before the payrolls report, ISM Manufacturing and JOLTS data are due Tuesday. ADP employment figures and the Federal Reserve’s Beige Book are scheduled for Wednesday, followed by ISM Services data on Thursday. Bitfinex analysts also identified the August labor-market and inflation reports as the next major tests for rate expectations.

    The August inflation report is scheduled for Sept. 11, placing another important data release immediately before the Sept. 15–16 FOMC meeting.

    Ko also pointed to the CLARITY Act as a crypto-specific U.S. catalyst, with a Senate procedural vote currently scheduled for Sept. 15. He considers the vote one of the largest asset-specific events on the September calendar, while the Federal Reserve meeting will determine the monetary backdrop for Bitcoin and other risk assets.

    For Bitcoin’s price, Mei sees $87,000 as the next level that would materially strengthen the bullish case after the cryptocurrency clears nearer resistance zones.

    “If we break the $87k mark and hold, $100K becomes the real target, and we could be looking at a bull market.”

  • Bitcoin Price Holds Firm at $78,623 Despite Iran Strikes and Fed’s Hawkish Pivot

    Bitcoin Price Holds Firm at $78,623 Despite Iran Strikes and Fed’s Hawkish Pivot

    Bitcoin remained resilient near $78,623 on Monday despite escalating violence in the Middle East and a sharply hawkish shift in Federal Reserve policy expectations. The cryptocurrency fell just 0.7% over 24 hours as fresh U.S. military strikes on Iran pushed oil prices higher and weighed on U.S. equities.

    Bitcoin’s relatively stable performance is drawing increased attention because risk assets would typically face heavier selling under similar geopolitical and monetary pressure. The cryptocurrency was on track to finish August with a gain of more than 24%, potentially marking its strongest monthly performance since 2017.

    Bitcoin Holds Near $78,623 as August Gain Tops 24%

    According to CoinGecko data cited by Decrypt, Bitcoin fell to an intraday low near $77,162 before recovering to trade around $78,623. The daily decline was modest compared with the scale of the weekend’s geopolitical developments and the market’s reaction to the Federal Reserve’s latest policy signals.

    Holding above $78,000 while geopolitical tensions and rising interest-rate expectations weigh on markets could indicate underlying demand rather than momentum-driven buying alone. However, derivatives activity suggests traders are adjusting existing positions instead of committing significant new capital.

    Ethereum Gains Nearly 30% Despite Fund Outflows

    Ethereum traded near $2,448 on Monday. Although Ether was slightly lower on the day, it was still approaching a monthly gain of 30%.

    Ethereum’s price strength contrasted with continued cash outflows from Ethereum investment funds. The divergence between Ether’s price and fund flows may indicate that investors are taking profits or shifting capital elsewhere even as the cryptocurrency’s market performance remains strong.

    U.S. Strikes on Iran Push Oil Higher and Stocks Lower

    The latest exchange of strikes between the United States and Iran was the first since late July. The developments renewed concerns about potential shipping disruptions in the Strait of Hormuz, a critical energy chokepoint whose closure could affect global oil supplies.

    West Texas Intermediate crude futures rose 2.6% to approximately $85.60 a barrel. Higher oil prices can intensify inflation expectations, adding pressure to central banks that are already considering whether further interest-rate increases may be necessary.

    U.S. stocks also declined. The S&P 500 fell 0.5% to about 7,673, while the Nasdaq Composite dropped 0.4%. Bitcoin’s limited decline stood out because the cryptocurrency has historically followed, and at times amplified, movements in technology-heavy indexes such as the Nasdaq.

    Hawkish Federal Reserve Remarks Lift September Rate-Hike Odds

    Geopolitical tensions were not the only factor affecting markets. Federal Reserve Chair Kevin Warsh delivered hawkish remarks at Jackson Hole, prompting investors to quickly reassess the likelihood of a September rate increase.

    The probability of a September hike rose to roughly 58%, up from about 35% before Warsh’s comments. The change represented a significant shift from the more accommodative policy outlook previously priced into markets.

    The stronger rate outlook also affected gold. The traditional safe-haven asset fell to near $4,440, as the impact of higher interest-rate expectations outweighed demand linked to rising geopolitical risk.

    Bitcoin Rally Slows as Spot ETF Inflows End

    Bitcoin’s August rally began losing momentum late last week after Warsh’s remarks. Spot Bitcoin exchange-traded funds also ended a nine-day streak of net inflows, reversing a period of sustained institutional buying.

    The shift is consistent with a broader reduction in risk exposure as investors prepare for the possibility of another Federal Reserve rate increase. Ethereum ETFs continued to experience cash outflows, extending a trend that began before the Jackson Hole event.

    Derivatives Volume Points to Trader Repositioning

    Iliya Kalchev, an analyst at Nexo Dispatch, viewed Bitcoin’s stability as the week’s more important development, potentially more significant than its monthly gain. He noted that it is unusual for an aggressive Federal Reserve stance and an active geopolitical conflict to pressure risk assets during the same week while Bitcoin continues to hold its ground.

    Derivatives data showed that 24-hour trading volume more than doubled to $183 billion, while open interest remained broadly unchanged. The combination suggests traders were repositioning existing bets rather than bringing substantial new capital into the market.

    That distinction is important when assessing Bitcoin’s market direction. Rising volume alongside flat open interest generally indicates that capital is rotating between positions rather than entering through a wave of new buying. The data points to a market recalibrating in real time, rather than one developing clear conviction in either direction.

    Jobs Data and CPI Are Next Tests for Bitcoin

    Gold’s decline toward $4,440 highlights the extent to which interest-rate expectations have changed market sentiment. Oil typically rises and stocks often fall during geopolitical shocks, while gold usually benefits from safe-haven demand. In this case, the increased probability of a Federal Reserve rate hike outweighed that traditional pattern.

    The next major catalysts for Bitcoin are the U.S. jobs report due Friday and the August Consumer Price Index reading scheduled for September 11. The data will help determine whether the Federal Reserve proceeds with a September rate increase and whether Bitcoin’s recent resilience continues.

    Because Bitcoin’s recent price movements have closely followed changes in rate expectations, the two economic reports could provide an important test of whether August’s gains represent a temporary rally or the foundation for a sustained advance.

    Frequently Asked Questions

    How did Bitcoin perform in August 2026?

    Bitcoin traded near $78,623 and was on track to finish August up more than 24%. That would make it the cryptocurrency’s strongest month since 2017, despite geopolitical tensions and shifting Federal Reserve policy expectations.

    How did the U.S. strikes on Iran affect traditional markets?

    The strikes pushed West Texas Intermediate crude prices up 2.6% to approximately $85.60 a barrel. The S&P 500 fell 0.5%, while the Nasdaq Composite declined 0.4%.

    How did Kevin Warsh’s Jackson Hole remarks affect markets?

    Warsh’s hawkish comments increased the estimated probability of a September Federal Reserve rate hike to roughly 58%, up from about 35%. Bitcoin’s rally subsequently slowed, and spot Bitcoin ETFs ended a nine-day inflow streak.

    What does derivatives data reveal about Bitcoin trading?

    Derivatives volume more than doubled to $183 billion over 24 hours, while open interest remained broadly flat. The pattern indicates that traders were repositioning existing positions rather than adding significant new capital.

  • Why Is Bitcoin’s Price Down Today?

    Why Is Bitcoin’s Price Down Today?

    Bitcoin (BTC) fell about 0.7% over the 24 hours to around $77,800 on Aug. 31, extending its retreat after another failed attempt to hold above the $80,000 level.

    The decline followed a shift in global market expectations after Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole on Friday. Warsh said inflation remained too high and indicated that further tightening could be necessary to bring inflation back to the Fed’s 2% target.

    The implied probability of a September rate increase climbed to approximately 57% on Monday, while the two-year US Treasury yield reached its highest level in more than a month. Barclays also revised its forecast after the speech and now expects two 25-basis-point rate increases, in September and December. The bank had previously expected interest rates to remain unchanged through the end of 2026.

    Bitcoin pressured by higher yields and geopolitical tensions

    Higher yields weighed on other risk assets. Asian equities fell on Monday, while US and European stock futures traded lower as markets adjusted to the prospect of tighter monetary policy.

    Renewed conflict between the US and Iran added to selling pressure over the weekend. US forces struck Iranian missile launchers on Larak Island, followed by retaliatory Iranian attacks against US forces in Jordan.

    Brent crude subsequently rose about 3.3% to $91.01 per barrel. The increase in oil prices added to inflation concerns as markets were already pricing in a higher probability of another Federal Reserve rate increase.

    Bitcoin entered the latest period of macroeconomic pressure after its strong August recovery stalled around $80,000. BTC gained roughly 23% over the past month and briefly traded above $81,000 last week, but repeated attempts to establish support in the $80,000-$82,000 region failed.

    Selling accelerated early on Aug. 31 after Bitcoin reached about $79,300 late on Saturday before falling below $78,000. The cryptocurrency briefly dropped toward $77,300, then surged toward $78,600 before giving up those gains.

    Leveraged positions contributed to the speed of the decline. Bitcoin futures open interest stood near $54.8 billion on Aug. 30, while roughly $390 million in crypto positions were liquidated over the previous 24 hours. Long positions accounted for about 70% of the losses.

    Institutional demand also weakened before the weekend. US spot Bitcoin exchange-traded funds recorded $201.8 million in net outflows on Aug. 28 after receiving $314.4 million on Aug. 25, $232.1 million on Aug. 26 and $242.2 million on Aug. 27, according to SoSoValue data.

    Despite Friday’s reversal, the funds remained at approximately $3.3 billion in net inflows for August.

    Bitcoin price analysis

    Bitcoin’s daily chart shows the price holding well above all four major exponential moving averages despite its retreat from $80,000.

    On the 2-hour chart, Bitcoin was trading near $77,800, below its 20-period EMA at $78,207, 50-period EMA at $78,288 and 100-period EMA at $77,399. The price remained above the 200-period EMA at $74,572.

    Bitcoin technical analysis

    The setup indicates that short-term momentum has weakened, with Bitcoin trading below its 20- and 50-period moving averages. However, the price remains above the 100- and 200-period EMAs, leaving the broader recovery structure intact for now.

    A sustained break below the $77,400 area could expose Bitcoin to further downside toward the 200-period EMA near $74,600. On the upside, a move back above the $78,200-$78,300 zone would bring the recent highs near $79,000-$80,000 into focus.

    The Stochastic RSI has also retreated from overbought territory. The faster line stands at 43.71, below the slower line at 46.56, indicating that near-term buying momentum has eased.

    A renewed move above $78,300 could signal improving momentum, while a deeper decline in the Stochastic RSI would reinforce the risk of further consolidation or a pullback. The bearish crossover shows that upside momentum has weakened while Bitcoin remains below $80,000.

    The Directional Movement Index (DMI) is not currently indicating a clear bearish trend. The positive directional indicator stands at 19.02, above the negative directional indicator at 15.40, while ADX is at 24.44.

    These readings suggest that buyers retain a slight directional advantage, although the relatively narrow gap between the two directional indicators points to limited conviction.

    Bitcoin’s inability to reclaim the $78,200-$78,300 area keeps that zone as immediate resistance. A sustained move above it could open the way toward $79,000 and the $80,000 psychological level.

    On the downside, the 100-period EMA around $77,400 is an important near-term support level. A break below it could expose the $76,000-$77,000 region, with the 200-period EMA near $74,600 providing deeper support.

    The Williams %R reading is around -66.11, indicating that Bitcoin has moved back toward the lower portion of its recent trading range but is not yet in oversold territory. The indicator would need to fall below -80 to signal more pronounced oversold conditions.

    A recovery in Williams %R alongside a move back above the $78,200-$78,300 EMA cluster would indicate improving short-term momentum. Conversely, a move below -80 combined with a break under the $77,400 support could increase the risk of a deeper pullback toward $76,000 and potentially the 200-period EMA.

  • September Fed Rate Hike Fears Look Overblown as Probability Stands at Just 58%, Not 90%

    September Fed Rate Hike Fears Look Overblown as Probability Stands at Just 58%, Not 90%

    Inflation concerns are weighing more heavily on Federal Reserve policy expectations than labor-market trends, according to Warsh, who said inflation is unlikely to return to the central bank’s target without intervention.

    Warsh pointed to the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, which stood at 3.7%. He described the reading as “are more concerning” relative to the Fed’s 2% inflation target.

    Broad-based price increases raise Fed concerns

    Over the past year, more than half of the goods and services tracked by the government recorded price increases of 3% or more. That compares with roughly one-third experiencing similar increases during the two decades before the pandemic.

    The comments were quickly interpreted as hawkish, or supportive of higher interest rates, fueling expectations on social media that the Fed could deliver a 25-basis-point rate hike in September. The benchmark borrowing rate currently stands in a range of 3.5% to 3.75%.

    Bitcoin fell 3% to below $77,000 on Friday, marking its first significant pullback after a sharp rally from approximately $63,000 to more than $80,000 earlier this month. Gold also declined, while the U.S. Dollar Index and Treasury yields both increased.

    Analysts question rate-hike fears

    Bianco is not alone in downplaying concerns about a potential rate increase. Firms including ABN AMRO Investment Solutions and Brandywine Global Investment Management have expressed similar skepticism.

    Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the IIF, said a possible rate hike would be intended to calm volatility in the Treasury market rather than represent outright monetary-policy tightening.

    Such a move could reinforce confidence in the Fed’s commitment to controlling inflation, potentially reducing the additional premium investors demand to hold long-term bonds and limiting further increases in Treasury yields.

  • Fedwatch Turns Hawkish as Odds of a September Rate Increase Reach 57%

    Fedwatch Turns Hawkish as Odds of a September Rate Increase Reach 57%

    The focus has shifted to the Federal Reserve’s September 16 federal funds rate decision. CME’s FedWatch Tool, which converts federal funds futures trading into implied policy probabilities, currently gives a 57% chance of a 25-basis-point rate hike that would lift the target range to 3.75%-4%. The probability of holding rates at the current 3.5%-3.75% range stands at 43%. With uncertainty elevated, forecasts for the next Federal Open Market Committee decision remain highly divided.

    September Fed Rate Hike Bets Rise Sharply

    The shift is even more striking compared with trader expectations just one week earlier. CME data showed that the probability of a rate hike was only 39.9% on Aug. 21. By Aug. 28, following the Jackson Hole speech, that figure had climbed to 57%, while bets on a September rate cut had almost disappeared.

    Prediction markets have not fully embraced the hawkish outlook. As of this weekend, Polymarket traders assigned a 52% probability to the Fed holding rates and 48% to a 25-basis-point hike. More than $66.6 million has changed hands on the wager, while the once-common rate-cut position now carries odds of just 1%.

    Traders on the prediction marketplace Kalshi are seeing similarly close odds. Its September Fed market, with more than $23.8 million in volume, puts the probability of no change at 52%, compared with 48% for a quarter-point hike.

    Another Kalshi betting contract gives the Fed a 67% chance of raising the federal funds rate at some point before 2027.

    Warsh Highlights Persistent Inflation Risks

    The market probabilities shifted significantly after Warsh’s keynote at the Jackson Hole Economic Policy Symposium. He avoided promising a September rate hike but repeatedly emphasized persistent inflation and the Federal Reserve’s responsibility to restore price stability.

    “There should be no misunderstanding: The Fed’s price-stability objective of 2 percent, as measured by the personal consumption expenditures (PCE) price index, is a firm, fixed target,” Warsh stressed.

    He also made clear that short-term interest rates remain the Fed’s primary tool for achieving that objective.

    The inflation figures Warsh cited help explain why traders interpreted his remarks as hawkish. The Fed’s preferred 12-month PCE inflation measure is running at 3.7%, while the six-month reading is higher at 4.1%. Neither figure is close to the central bank’s fixed 2% target, although some Fed critics believe that level will never be reached again.

    Warsh also described an economy that gives policymakers little reason to fear the effects of higher interest rates. Business investment is rising rapidly, particularly in the artificial intelligence (AI) sector. S&P 500 profits have increased more than 20% over the past year, while real consumer spending has grown more than 2% over four quarters. Unemployment remains at 4.1%.

    Markets Face a Close September Fed Decision

    That combination of persistent inflation and solid economic growth creates a difficult environment for federal funds rate doves. Higher rates can cool demand and inflation, while continued growth and employment give policymakers more room to tighten monetary policy without immediately damaging the labor market.

    Warsh still declined to commit to a rate hike, saying:

    “I stand here today committed to a discipline, not to a decision.”

    The message was deliberate: Markets can speculate about September, but the Federal Reserve does not intend to provide traders with an answer weeks before the meeting. For investors, the decision has become a genuine coin toss, with substantial money positioned on both outcomes. CME futures currently favor a hike, while Polymarket and Kalshi narrowly lean toward a rate hold.

    Inflation and labor-market reports will now carry even greater weight, and either could shift the balance before Fed officials meet in mid-September.

    Source: cryptonews.net

  • Fed Chair Kevin Warsh Triggers $488 Million Crypto Liquidation Cascade as Rate Hike Expectations Rise

    Fed Chair Kevin Warsh Triggers $488 Million Crypto Liquidation Cascade as Rate Hike Expectations Rise

    Bitcoin fell below $77,000 on Friday after Fed Chair Kevin Warsh revived concerns that interest rates could move higher at Jackson Hole.

    Data from CryptoSlate showed Bitcoin, the largest cryptocurrency by market capitalization, dropping as low as $76,909 before recovering to $77,712 at press time. The cryptocurrency remained down about 4% over the previous 24 hours.

    The decline intensified a broader crypto deleveraging event that wiped out nearly $488 million from derivatives traders as markets sharply repriced expectations for Federal Reserve policy.

    Warsh revives rate-hike fears

    Traders raised the probability of a September rate increase to about 60%, up from roughly 35% before Warsh’s remarks. Short-term Treasury yields also climbed, while the US dollar strengthened.

    Warsh gave investors several reasons to reassess expectations that the Federal Reserve was preparing to ease monetary policy. He argued that inflation remained too high despite improved price data during the summer.

    The Fed’s preferred personal consumption expenditures price index was running at 3.7% over the past year and at a 4.1% annualized pace over the past six months. Both readings remain well above the central bank’s 2% target.

    Recent inflation reports had not convinced Warsh that the underlying trend had changed. He said:

    “We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”

    Warsh also questioned whether current borrowing conditions were restraining demand sufficiently. Credit markets showed limited signs of policy restraint, while corporate bond spreads remained historically narrow and bank lending standards relatively easy.

    He added:

    “I would be hard pressed to describe broad financial conditions as restrictive.”

    The combination delivered a hawkish signal to financial markets. Warsh described labor conditions as consistent with full employment, pointed to healthy consumer spending and strong business investment, and said the Fed’s “predominant focus right now should be on prices.”

    For crypto traders, the implication was immediate. A resilient economy gives the Fed more room to keep monetary policy tight, while persistent inflation increases the risk that its next move could be another rate increase rather than the easier financial conditions that risk assets had been anticipating.

    The two-year Treasury yield rose to a one-month high after the remarks as investors increased their bets on another rate increase.

    Leveraged crypto traders suffer nearly $488 million in liquidations

    The shift in rate expectations hit a crypto market that had entered Friday with substantial leveraged exposure following Bitcoin’s recent rally above $80,000.

    CoinGlass recorded $487.68 million in liquidations across the cryptocurrency market during the previous 24 hours, affecting 97,691 traders. More than $200 million in positions were closed within one hour of Warsh’s speech.

    Bitcoin and Ethereum led crypto liquidations as 24-hour losses reached $487.81 million across 97,772 traders. Source: CoinGlass

    Long positions accounted for more than $360 million of the losses, indicating that traders positioned for further gains absorbed most of the reversal. Bitcoin positions generated about $141 million of the liquidations.

    The largest individual liquidation was an $11.66 million ETH-USDT position on Binance.

    Warsh’s speech also affected the gold market. Reports said gold and silver lost more than $700 billion in combined market value following the remarks.

    Higher interest-rate expectations create several simultaneous headwinds for cryptocurrency markets. Rising Treasury yields increase the returns available from dollar-denominated assets, while a stronger dollar typically tightens financial conditions for speculative investments.

    Expectations for more restrictive monetary policy can also reduce the liquidity that helped drive Bitcoin’s recent advance.

    Friday’s reaction showed how quickly that relationship can reassert itself. Bitcoin had been trading near $80,000 before Warsh’s speech became the dominant macroeconomic catalyst. Contemporaneous reports showed the cryptocurrency falling more than 3% as rate-hike expectations increased.

    Less Fed guidance could increase crypto rate volatility

    Warsh offered little certainty about the Federal Reserve’s next move.

    The chairman has moved away from the forward guidance used heavily by his predecessors, arguing that telegraphing policy paths can distort markets and limit the central bank’s flexibility when economic conditions change.

    He also rejected the idea of giving investors a mechanical reaction function that would dictate how interest rates should respond to individual economic reports.

    This approach could make upcoming inflation and employment data more important for Bitcoin and other risk assets. Traders will have fewer signals from the Fed about how policymakers intend to respond to new economic information.

    Apollo Global Management Chief Economist Torsten Slok has argued that this type of policy regime could push more interest-rate moves outside Federal Reserve meeting days. Investors would continuously reprice economic data instead of waiting for policymakers to validate existing expectations.

    Slok noted that since the Fed began raising rates in 2022, much of the increase in longer-term Treasury yields has occurred outside Federal Open Market Committee meetings. Inflation reports, employment data, Treasury issuance and the term premium became larger drivers of the bond market.

    Warsh reinforced that philosophy on Friday, saying markets should form their own expectations rather than look primarily to the Fed for their “next trade.”

    For Bitcoin, Friday offered an early example of what that environment could look like.

    Warsh stopped short of committing to a September rate increase, leaving incoming data to determine whether the Fed follows through. However, his insistence that inflation remains too high, financial conditions are not particularly restrictive and interest rates remain the central bank’s main policy tool was enough to revive fears of tighter monetary policy.

  • Bitcoin Rally Stalls, but Long-Term Sentiment Remains Bullish

    Bitcoin Rally Stalls, but Long-Term Sentiment Remains Bullish

    Bitcoin fell to $76,877 on Friday after Federal Reserve Chair Kevin Warsh delivered a hawkish keynote at Jackson Hole, confirming the resistance zone that had limited the cryptocurrency earlier in the week.

    September rate-hike expectations rose to approximately 56%, up from about 35% a day earlier, after Warsh said the Federal Reserve still has “work to do” on inflation. Despite the sell-off, Myriad traders continued to favor Bitcoin rising to $84,000 over falling to $55,000.

    Bitcoin declined from an overnight high of $81,455, surrendering most of its double-digit weekly gain. The high was reached within a resistance zone that had already capped several attempted breakouts this year.

    Myriad: How high will Bitcoin go? Click to make your prediction.

    Warsh’s Jackson Hole speech drives Bitcoin lower

    Warsh marked his 100th day as Fed chair by offering markets no fresh policy guidance, but his comments were enough to pressure risk assets. In his keynote, he said the Fed needs to see inflation moving clearly toward its target and doing so at a sufficient pace before it can declare its work complete. Until then, the central bank still has “work to do.”

    Traders interpreted the remarks as hawkish. According to the CME Group’s FedWatch tool, the probability of a September rate hike increased to 55.7% from 35.4% the previous day.

    The move also affected leveraged crypto positions. CoinGlass data showed approximately $481 million in liquidations across the cryptocurrency market during the 24 hours surrounding the speech. More than $360 million involved long positions caught off guard by Bitcoin’s decline. Bitcoin ended Friday at $77,557, down 3.39%.

    Bitcoin price analysis: What the charts show

    From a technical perspective, the pullback looks more like a consolidation phase than a confirmed trend reversal. Bitcoin’s Relative Strength Index stands at 69.7, below the overbought level above 80 that preceded Tuesday’s rejection. Meanwhile, the Average Directional Index is near 39.5, still indicating a strong trend rather than a broken one.

    Bitcoin remains within the bullish move that carried it from the June low near $68,858 to this week’s high around $81,455. If selling intensifies, traders are likely to monitor the $73,670-$75,157 area first. A close below that zone would put both the 50-week moving average and the June breakout structure under pressure.

    On the upside, the $81,000-$82,500 area remains the key resistance shelf. Bulls need to reclaim it to establish a path toward fresh highs.

    Myriad traders continue to favor Bitcoin at $84,000

    The longer-term bullish outlook is reflected in Myriad’s “BTC next move” market, which has been active since late February. The market has recorded $231,000 in trading volume and has no fixed resolution date.

    Its two outcomes—a move to $84,000 or a decline to $55,000—have repeatedly exchanged the lead since spring as Bitcoin’s price moved sharply in both directions. That pattern changed this month: the probability of the $84,000 outcome rose by 31.7 percentage points to 77%, compared with 23% for the $55,000 scenario. Friday’s rejection from resistance did not materially alter that split.

    Myriad: Where does Bitcoin go next? Click to make your prediction.

    The last time traders were this bullish was around April.

    Bitcoin’s fundamental support remains intact

    The fundamental case for higher Bitcoin prices has not significantly changed. U.S. spot Bitcoin exchange-traded funds recorded $2.8 billion in inflows over eight consecutive days through Wednesday, their longest such streak since April.

    The demand followed a Treasury Department announcement that it would at least double its purchases of long-dated bonds beginning September 9. The move supports a segment of the bond market that has faced weak demand since June. Lower long-term yields and a weaker dollar revived the “debasement trade” that helped Bitcoin climb from approximately $62,000 to $80,000 this month.

    Warsh’s remarks did not change that backdrop. He outlined no explicit interest-rate path and instead highlighted an inflation condition the Fed has not yet met.

    Why Bitcoin traders should watch the bears

    In the short term, the market setup still calls for caution. Warsh’s rejection of forward guidance leaves traders without a clear policy signal until the Fed’s next rate decision. Bitcoin therefore remains vulnerable to headline-driven volatility around every inflation report released before then.

    The PCE price index is increasing at an annual rate of 3.7%, nearly twice the Fed’s 2% target, and Warsh provided no timetable for inflation to return to that level.

    Bitcoin has already faced multiple rejections at the current resistance zone in recent months. Warsh’s speech gave bulls no clear reason to expect the Federal Reserve to make the next attempt at a breakout easier.

    Disclaimer

    The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.