Traders priced Fed hold above 90% before Oct. 28 decision, CME FedWatch showed
In brief
- CME FedWatch put Fed hold odds above 90% before the Oct. 28 decision, Decrypt reported.
- Federal funds rate stood at 3.75% to 4.00% after September's unanimous hike.
- December hike odds stood at 75% to 80% across futures and prediction markets.
- Bitcoin sat around $80,700, just below a zone where sellers stopped rallies, Decrypt reported.
What the preview laid out
The federal funds rate stood at 3.75% to 4.00% going into the meeting, after the Fed raised it in September (its first hike since 2023, on a unanimous 12-0 vote, according to Decrypt). That rate sets the baseline for what consumers pay on credit cards and loans.
The data backdrop wasn't soft. Citing the Labor Department, Decrypt said consumer prices rose 3.7% in the 12 months through September, with gasoline up 9.1% in the month alone. Employers added just 29,000 jobs in September against forecasts of about 90,000, and unemployment was 4.2%. The outlet pointed to oil trading near $100 a barrel (the U.S.-Iran war had squeezed global supply) as a major driver of that inflation.
Analysts cited by Decrypt were calling the likely outcome a "hawkish hold," meaning rates unchanged while the tone leaves more hikes on the table. Futures and prediction markets gave 75% to 80% odds of another quarter-point hike at the Dec. 8-9 meeting, the outlet reported, and minutes from September showed most officials judged another increase would likely be appropriate by year-end.
Fed Chair Kevin Warsh hadn't tipped his hand before the meeting.
Asked in September whether more hikes would follow, Warsh said, “I’m not going to prejudge any future decisions we make.”
Where Bitcoin fit
In Decrypt's analysis, Bitcoin traded around $80,700, just below a zone where sellers had repeatedly stopped rallies this year. The outlet's argument was simple: Bitcoin pays no yield, so when Treasuries pay more, money tends to move out of riskier assets like crypto and stocks. The 10-year Treasury yield was around 5%, after peaking at 5.31% on Oct. 5.
Fed days have hit crypto before. About $481 million in crypto positions were liquidated within 24 hours of Warsh's Jackson Hole speech in August, Decrypt reported, and more than $360 million of that was long positions.
What Decrypt said to watch
Decrypt flagged the vote split as the tell. The July vote was 9-3 (three members favored a hike), and the outlet said a dissent in favor of tightening would suggest a December hike was close to locked in. The Fed didn't have new economic projections slated for the Oct. 28 meeting; those were due in December.
Frequently asked questions
What is a "hawkish hold" from the Fed?
Analysts cited by Decrypt used "hawkish hold" to describe the likely October outcome: the Fed leaves rates unchanged, but its tone leaves more hikes on the table. Futures and prediction markets gave 75% to 80% odds of another quarter-point hike at the Dec. 8-9 meeting, according to Decrypt.
Why do Fed rate decisions matter for Bitcoin?
Decrypt argued that because Bitcoin pays no yield, money tends to move out of riskier assets such as crypto and stocks when Treasuries pay more. The 10-year Treasury yield was around 5% after peaking at 5.31% on Oct. 5, according to the outlet.
