Home›Crypto›Market Structure›Hawkish UBS Fed outlook extends rate pressure risk for…

Hawkish UBS Fed outlook extends rate pressure risk for Bitcoin

UBS now expects two Fed rate hikes of 25 basis points each in September and December, keeping borrowing costs elevated through year end and weighing on Bitcoin sentiment.

Reported · Written up by our desk · Market Structure

UBS Global Wealth Management has extended its outlook for tighter Fed policy, forecasting two rate hikes of 25 basis points each in September and December, which could keep macro headwinds on Bitcoin through December. Reuters reported Sept. 7 that the UBS view moves away from its prior expectation of no policy change this year.

The shift is tied to the stronger August labor data, hawkish Fed communication, and concerns about inflation risks from supply bottlenecks. The Bureau of Labor Statistics said employers added 162,000 jobs in August, while the unemployment rate held at 4.1%, with hiring exceeding the average monthly gain of 31,000 over the prior 12 months, despite uneven hiring across sectors.

CryptoSlate reported that futures pricing has moved toward this scenario, with traders assigning about a 58% chance of a quarter-point hike at the Sept. 15 to 16 meeting, up from 52% before the jobs report. For Bitcoin, the concern is that higher rate expectations help support Treasury yields and strengthen the appeal of dollar assets, reducing risk appetite.

CryptoSlate also pointed to how the labor market affects the Fed’s policy tradeoff, noting that continued job resilience can give policymakers more room to focus on inflation while maintaining restrictive conditions. It added that Governor Christopher Waller, in remarks on Sept. 3, described holding rates steady if inflation progress continues, while considering a hike if inflation is still too hot, making inflation the next key variable for the September decision.

Latest closeBitcoin $78,985.44 ▼1.7%

More like this

Sources