Odds of a September Federal Reserve rate hike fell back to a coin-flip on Friday, a sharp reversal after the probability touched 70% just a day earlier and sat as low as 37% a week before that.
The swing tracks a rally that has pushed Bitcoin (BTC) toward $82,000.
Rate Bets Whipsaw Ahead of the September Meeting
The CME Group (Chicago Mercantile Exchange) FedWatch tool now shows the September 16 meeting split almost evenly between holding the benchmark rate at 3.50-3.75% and lifting it a quarter point to 3.75-4.00%.
The tool had assigned the hike a 70% probability as recently as Thursday.
The FedWatch data also pushed back the timeline for a second hike. A move to the 4.00-4.25% range isn’t priced as the most likely outcome until the March 2027 meeting. Rather than December 2026 as futures had implied earlier in the week.
Iran and Oil Are Driving the Volatility
The odds have been whipsawing alongside oil prices and bond yields tied to the Iran conflict, which has kept traders guessing on inflation.
Fed Chair Kevin Warsh faced a market split on the hike question at Jackson Hole, and the central bank remains divided over whether to keep tightening.
Bitcoin has moved in step with the shifting rate outlook. The asset blasted past $80,000 this week as talk of an end to the Iran war spread, and traded near $81,000 on Friday, up roughly 5% over 24 hours.
A lower hike probability typically eases pressure on Treasury yields and the dollar. These are both tailwinds for Bitcoin’s price action this week.
Whether that holds through the September 16 decision may depend on how the Iran situation, and the next inflation print, develop in the coming days.
Bitrue