Four More Fed Rate Hikes? What Are Markets Pricing In as Bitcoin Falls?
As Bitcoin slips below $83,000, expectations for tighter monetary policy for longer are coming to the fore in markets. CME FedWatch data cited by CoinDesk point to a Fed rate range one percentage point above the current level for June 2027.
The article cites a 4.75%–5% range as a possible outcome for June 2027. Reaching that level from the current 3.75%–4% range would amount to a total of 100 basis points, equivalent to four 25-basis-point hikes. This does not mean the Fed has announced that it will raise rates at four meetings; it reflects market pricing for future interest rates.
CoinDesk notes that the Fed also raised rates by 25 basis points this month. Therefore, the four-hike equivalent cited in the article points to a rate level above the current one. The source does not provide the precise probability percentage for the June 2027 scenario.
Bond yields aren’t the only source of pressure on Bitcoin
In the market outlook cited by the source, the 10-year U.S. Treasury yield is above 5.1%, while the 20-year yield is close to 5.5%. As the dollar index rises above 101, up 3% year to date, Bitcoin has fallen from a recent high of about $87,500 to below $83,000. These prices reflect the market at the time the article was prepared.
High bond yields and a strong dollar stand out as factors putting pressure on risk assets. The yields in the bond market are not the same measure as the Fed’s short-term policy rate.
Three factors driving rate expectations
CoinDesk points to strong growth, inflation uncertainty, and rising capital needs. The S&P Global Composite PMI, which tracks U.S. manufacturing and services activity, rose to 58.4 in September, beating expectations. Tensions in the Middle East are adding uncertainty to the inflation outlook through oil and diesel prices.
Another factor is heavy borrowing to finance AI infrastructure. This financing need is increasing bond issuance, which competes with U.S. Treasury bonds for investors’ money.
The question facing the market is whether expectations of more Fed rate hikes will continue to push bond yields and the dollar higher. June 2027 pricing is not a settled decision; it could change with new economic data and Fed statements.