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 puts the odds of a 25-basis-point hike Wednesday at 94.5%, up from under 50% a month ago, which would push the federal funds rate to 3.75%-4%.
- A Wall Street Journal survey found nearly every major bank expects the September hike, with Barclays, Citigroup, JPMorgan, Morgan Stanley and UBS forecasting 50 bps of total tightening in 2026, while Bank of America, Deutsche Bank and RBC call for 75 bps.
- Headline CPI ran at 3.4% annually in August with core at 2.5%, both above the Fed's 2% target, and oil prices pushed higher by the ongoing conflict with Iran have added price pressure that tariffs or rate cuts can't easily offset.
- President Trump, Vice President JD Vance and Treasury Secretary Scott Bessent have all publicly pushed for cuts in the past two weeks, with Trump threatening to halt trade with countries running surpluses with the U.S. if rates don't come down.
- The 10-year Treasury yield touched 5.04% this week — its highest level since July 2007 — as traders priced in the hike and a longer stretch of elevated rates, while the two-year yield hit its highest level since July 2024.
- Bitcoin traded around $75,700 on Tuesday, down about 3.2% on the day after the Clarity Act crypto market structure bill failed its Senate cloture vote, with $73,200 flagged as a key technical line.
- Fed Chair Kevin Warsh was handpicked by Trump in January and sworn in in May with Trump urging 'total independence,' but Warsh now faces a hike-driven political clash two months before midterms where polls already show voter frustration over high prices.
Why it matters: The Fed's first hike since 2023 lands two months before midterms because of the tariff and Iran-conflict policies Trump himself championed — meaning Republican candidates now inherit both higher borrowing costs and the blame. With the 10-year yield already at a July 2007 high of 5.04%, the bond market is pricing in not just Wednesday's move but a longer stretch of elevated rates that strengthens the dollar and pressures Bitcoin below its $73,200 technical line.
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