Wall Street Bets on Fed Rate Hike: Here's What It Means for Bitcoin, Bonds and Trump — SkimNews
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- CME's FedWatch tool shows 94.5% odds of a 25-basis-point rate hike Wednesday, which would push the federal funds rate to 3.75%-4% from 3.50%-3.75%, up from under 50% a month ago
- Major banks including Barclays, Citigroup, JPMorgan, Morgan Stanley, and UBS forecast 50 bps of total tightening in 2026, while Bank of America, Deutsche Bank, and RBC call for 75 bps and Goldman Sachs pencils in only this week's move
- President Trump handpicked Fed Chair Kevin Warsh in January and has spent the past two weeks publicly pressuring him not to hike, threatening to halt trade with countries running surpluses with the U.S.
- The 10-year Treasury yield touched 5.04% this week, its highest level since July 2007, while the two-year yield hit its highest level since July 2024 as markets priced in both the hike and an extended period of elevated rates
- Bitcoin traded around $75,700 on Tuesday, down 3.2% on the day after the Clarity Act failed its Senate cloture vote, with technical support at $73,200 seen as the line that opens the door to $71,000
- August inflation ran at 3.4% headline CPI and 2.5% core — both above the Fed's 2% target — and the July decision to hold rates passed by just a 9-3 FOMC vote with three members already pushing for a hike
Why it matters: This is the Fed's first hike since 2023, and it lands two months before midterm elections where polls already show voter frustration with high prices and borrowing costs. Trump installed Warsh specifically expecting lower rates — and got the opposite, creating an open confrontation between a president and his own handpicked Fed chair over the direction of monetary policy.
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