Bitcoin is sitting at roughly $77,000, up about 25% from its summer lows, and staring down the most consequential Federal Reserve meeting in years. The FOMC convenes September 15-16, and futures markets are pricing in an 81.5% to 90% probability of a 25-basis-point rate hike. If it happens, it would be the Fed’s first rate adjustment since July 2023.
The macro setup
The catalyst behind the expected policy shift is inflation data that refuses to cooperate with the soft-landing narrative. August’s Producer Price Index came in at 0.4% month-over-month and 5.4% year-over-year, both figures hotter than what markets wanted to see.
Fed Chair Kevin Warsh reinforced the hawkish tone at the Jackson Hole conference, signaling that the central bank isn’t done fighting price pressures. Treasury yields have responded accordingly, creeping toward the 5% threshold. For context, yields at that level tend to pull capital away from risk assets by making plain-vanilla government bonds look increasingly attractive relative to volatile alternatives like crypto and equities.
Bitcoin’s positioning tells a story
