Bitcoin Faces 87% Fed Hike Odds Wednesday: Will Treasury Save the Rally?
Bitcoin Faces 87% Fed Hike Odds Wednesday: Will Treasury Save the Rally?
The odds of a Federal Reserve interest rate hike on Wednesday, Sept. 20, remain elevated at 87% according to the CME Fedwatch Tool on Monday. Bitcoin slipped into a downtrend after hitting $27,416 resistance after surging by roughly 5.5% last week.
The primary market driver this week is the Federal Open Market Committee meeting on Tuesday and Wednesday in the United States. While Wall Street forecasts a steady 5.25% to 5.50% benchmark rate, market indicators for a November hike increased to 31.4% after its September Consumer Inflation Report smashed estimates last week.
Bitcoin faces a watershed moment as observers watch to see if the 10-year Treasury yield exceeds 4.34%, the peak it hit in 2023. Notably, equity investors have moved cash into low-risk Treasuries to leverage high yields while easing possible recessionary headwinds.
Financial analysts consider Treasuries valued at more significant discounts more attractive as they output greater yields. This allows investors drawing fixed income as a hedge against buying risky stocks.
Global Markets Eye Treasury Yields
The yield on the benchmark 10-year Treasury note rose to 4.33% in the North American trading hours, fueling bets of an imminent global slowdown as foreign investors seek refuge in Dollar-pegged assets.
The increase in yields heightens selling pressure on non-yielding assets, including equities and gold. Despite gold’s status as an inflation hedge, traders have continued rotating cash from short-term securities affected by rate hikes to risk-savvy stocks.
The dollar index (DXY) measures greenbacks against a basket of six international currencies, gained 0.2% on Monday just as the euro and pound lost ground against the American currency.
A 10-year bond typically pays better yields than cash equivalents or savings accounts. Traders in Bitcoin, a high-risk asset that yields a lot of volatility, also have much less incentive to act with Treasuries available during rate hike periods. Comparatively, investors will consider returns on Certificates of Deposits (CD) offering 5% returns backed by the FDIC or higher versus cryptos offering no liquidity.
This article has been published in beincrypto.com via Yahoo News.
Bitcoin Faces 87% Fed Hike Odds Wednesday: Will Treasury Save the Rally?
Traders price an 87% chance of a Fed rate hike Wednesday as Caitlin Long argues Treasury now holds the real power.
finance.yahoo.com
