Fed Holds Rates Steady as December Hike Odds Rise — SkimNews
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- Federal Reserve holds rates at 3.75%-4.00% after September's 12-0 hike, with Chair Kevin Warsh declining to offer forward guidance on future moves
- CME FedWatch indicates over 90% probability the Fed will keep rates unchanged today, while prediction markets place odds even higher
- Inflation rose 3.7% year-over-year through September, driven in part by a 9.1% monthly jump in gasoline prices amid oil near $100 a barrel
- Labor market showed signs of weakening, with only 29,000 jobs added in September versus 90,000 expected, and unemployment holding at 4.2%
- 10-year Treasury yield hovers around 5%, up from earlier in the year, offering a nearly risk-free return that competes with volatile assets like Bitcoin
- Bitcoin trades around $80,700, just below a key resistance level, as higher Treasury yields and hawkish Fed sentiment pressure non-yielding assets
Why it matters: With inflation still above target and the labor market cooling, the Fed’s likely ‘hawkish hold’ keeps borrowing costs high and increases pressure on risk assets. The 75% to 80% market-implied odds of a December hike mean businesses and consumers face tighter financial conditions for longer, while Treasury yields near 5% make alternatives to crypto and stocks more attractive.
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