Traders price in 4 Fed rate hikes by June 2027 as bitcoin slides below $83,000
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Traders are currently pricing in four additional quarter-point Federal Reserve rate hikes by June 2027, raising the federal funds range to between 4.75% and 5%. This anticipation coincides with rising U.S. Treasury yields, including the 20-year yield nearing 5.5% and the 10-year yield exceeding 5.1%. Amid this environment, bitcoin has declined below $83,000 from its recent high of $87,500, while gold remains just above $4,200.
Why it matters
The expectation of prolonged tighter monetary policy has pushed Treasury yields to new highs, placing pressure on risk assets like bitcoin and gold. Rising yields and a strengthening U.S. dollar, which has increased 3% this year, are contributing to downward pressure on these assets. This dynamic reflects markets adjusting to a combination of strong economic growth, inflation uncertainties, and increased capital demands.
Key context
The Federal Reserve has already raised the federal funds rate by 25 basis points this month, starting from a range of 3.75% to 4%. Treasury yields are climbing not only in the U.S. but also abroad, with government bond yields under pressure in major economies like France, Germany, the U.K., and Japan. Economic indicators such as the S&P Global composite PMI showing strong growth, Middle East tensions affecting inflation outlooks, and heavy borrowing for AI infrastructure are cited as factors pushing yields higher.
Key numbers and entities
The CME FedWatch tool forecasts four additional quarter-point rate hikes by June 2027. The U.S. 20-year Treasury yield is approaching 5.5%, while the 10-year yield exceeds 5.1%. Bitcoin price has fallen below $83,000, down from a recent high of $87,500. The dollar index is above 101, up 3% year-to-date. The long-bond ETF (TLT) has hit all-time lows under $80. The Japanese yen is trading at 159 against the U.S. dollar, reversing recent intervention gains.
What remains unclear
The report does not specify the timing of the expected additional Fed rate hikes between now and June 2027. It also does not quantify how much longer the tighter monetary policy might persist beyond that date. Additionally, the direct impact of these changes on broader cryptocurrency markets beyond bitcoin, or specific investor reactions, is not detailed.