- Markets price a 92.5% chance the Federal Reserve will raise rates by a quarter point on Wednesday, the first hike since July 2023.
- Analyst Tom Lee calls a potential hike a “policy error,” as supply-shock inflation is fading without tighter policy.
- Bitcoin slipped below $77,000 on Tuesday, with retail sentiment remaining ‘extremely bearish’ on Stocktwits.
Bitcoin slipped below the $77,000 mark on Tuesday ahead of the Federal Reserve’s rate decision on Wednesday, with markets pricing in a 92% chance of a quarter-point hike. The move would end more than a three-year pause in rate increases, according to CME Group’s FedWatch tool.
However, crypto analysts like Bitmine Immersion Technologies chairman Tom Lee and MNFund founder Michael van de Poppe believe a rate hike is unlikely. Bitcoin’s price fell over 3.3% in the last 24 hours to around $76,200, while retail sentiment on Stocktwits remained ‘extremely bearish.’
Van de Poppe said he does not expect a rate hike and that markets will likely rise regardless. He added that he would buy any further dip, and if Bitcoin reclaims $78,000, it could open a move between $90,000 and $92,000.
Meanwhile, Lee argued against the hike on Monday, calling it a “policy error.” He agreed with Moody’s Analytics Chief Economist Mark Zandi that the Fed “can wait,” as much of the remaining inflation comes from supply shocks that are fading.
Lee cited Goldman Sachs estimates, which note those shocks add about 1.75 percentage points to Core PCE and should fade by 100 bp into early 2027 even without tighter policy. “Why hike when Core PCE [is] set to decline 100 bp without a hike?” he asked.
A quarter-point hike would raise the Fed’s target range from 3.50% to 3.75%, to between 3.75% and 4%. Data cited by The Wall Street Journal’s Nick Timiraos showed 20 of 22 firms expect a hike this month.
The Fed last raised rates in July 2023, when Bitcoin traded just below $30,000 and barely moved after the decision. This time, Bitcoin is down 12% year-to-date and has fallen around 32% over the past month.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
