Traders price in 4 Fed rate hikes by June 2027 as bitcoin slides below $83,000 — SkimNews
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- CME FedWatch traders are pricing in four quarter-point Fed rate hikes by June 2027, putting the most likely outcome at a 4.75% to 5% federal funds range on top of the 25 bps hike already made this month.
- U.S. Treasury yields are pushing to new highs across the entire curve, with the 20-year yield approaching 5.5% — sending the long-bond ETF (TLT) to all-time lows below $80 — and the 10-year yield above 5.1%, levels last seen in 2007.
- Government bond yields are also under pressure in France, Germany, the U.K. and Japan, as rising borrowing costs spread beyond the U.S.
- Bitcoin has fallen below $83,000 from a local high of $87,500, weighed down by higher yields and a stronger dollar index that has climbed above 101, up 3% year-to-date.
- Gold is hovering just above $4,200, down 25% from its January all-time high.
- The U.S. economy remains strong, with the S&P Global composite PMI rising almost 4.3% to 58.4 in September, while Middle East tensions push oil and diesel prices higher and heavy borrowing for AI infrastructure adds to bond supply competing with Treasuries.
- The Japanese yen continues to weaken against the dollar, back at 159 yen and reversing much of its recovery from around 153 following last month's reported U.S.–Japan intervention.
Why it matters: Traders expect the Fed to deliver four more quarter-point hikes after the 25bp increase already made this month, pushing the fed funds rate to 4.75%-5% by June 2027. With 20-year Treasury yields approaching 5.5% and the 10-year at 5.1% — a level not seen since 2007 — governments, corporates and mortgage borrowers face materially higher financing costs, while bitcoin and gold holders absorb losses from a strengthening dollar index above 101.
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