Key Takeaways
- • CME FedWatch data shows a 90.6% probability that the Federal Reserve holds its policy rate at 3.75-4.00% at its October 27-28 meeting, with a 9.4% probability of a 25 basis point hike to 4.00-4.25%, according to Cryptonews.net.
- • Market expectations have shifted sharply over the past month: the probability of an October hike was 64.2% on September 25, while the probability of no change now exceeds 90%.
- • Pricing for the December 9 meeting is more hawkish, with a 74.2% probability that rates end the year above current levels, per CME FedWatch data cited by Cryptonews.net.
- • PIMCO expects the Fed to hold in October but sees a 25 basis point increase in December as the likely next step, citing AI-driven demand, tariffs, and energy-related inflation risks.
- • Fed Chairman Kevin Warsh's press conference and the December signals are expected to matter more than the October decision, with potential pressure on Bitcoin via the dollar and bond yields if he leaves the door open to tightening.
Summary
Bitcoin and cryptocurrency markets enter the week focused on the Federal Reserve's October 27-28 policy decision, which will be announced Wednesday, October 28 at 9:00 PM Turkish time, with Chairman Kevin Warsh scheduled to take reporters' questions at 9:30 PM, according to Cryptonews.net. Market pricing strongly favors a hold. CME FedWatch data checked on the day of the report put the probability of the policy rate staying in the 3.75-4.00% range at 90.6%, with a 9.4% probability of a 25 basis point increase. No rate cut is priced in for this meeting.
The shift in expectations has been marked. On September 25, the probability of a hike at the October meeting stood at 64.2%, against 35.8% for an unchanged rate. The Fed raised rates by 25 basis points at its September meeting in a unanimous decision, stating that economic activity remained robust and inflation remained high. Attention is therefore on how the Fed frames its message following that hike.
The outlook beyond October is less settled. According to CME FedWatch data, the probability that rates finish the year above their current level after the December 9 meeting is 74.2%. Within that, a 67.5% probability is assigned to the 4.00-4.25% range and 6.7% to the 4.25-4.50% range, while 25.8% is assigned to rates remaining in the current range.
PIMCO, in an analysis dated October 22, expects the Fed to keep rates unchanged in October but sees the tightening trend continuing, with a 25 basis point increase in December as the likely next move. The firm cited AI investment supporting demand, tariffs, and energy-related inflation risks as key factors, while noting that rising long-term bond yields tightening financial conditions could give the Fed room to maneuver.
Because no new economic projections or dot plot will be released at this meeting, the decision text, any dissenting votes, and Warsh's press conference will carry particular weight. For crypto markets, Cryptonews.net notes that Warsh's comments leaving the door open to further tightening could add pressure on Bitcoin through the dollar and bond yields, while a firmer signal of patience could support risk appetite. The schedule continues on Thursday, October 29, with the September personal income and spending report, which includes the PCE inflation gauge the Fed watches closely.
The shift in expectations has been marked. On September 25, the probability of a hike at the October meeting stood at 64.2%, against 35.8% for an unchanged rate. The Fed raised rates by 25 basis points at its September meeting in a unanimous decision, stating that economic activity remained robust and inflation remained high. Attention is therefore on how the Fed frames its message following that hike.
The outlook beyond October is less settled. According to CME FedWatch data, the probability that rates finish the year above their current level after the December 9 meeting is 74.2%. Within that, a 67.5% probability is assigned to the 4.00-4.25% range and 6.7% to the 4.25-4.50% range, while 25.8% is assigned to rates remaining in the current range.
PIMCO, in an analysis dated October 22, expects the Fed to keep rates unchanged in October but sees the tightening trend continuing, with a 25 basis point increase in December as the likely next move. The firm cited AI investment supporting demand, tariffs, and energy-related inflation risks as key factors, while noting that rising long-term bond yields tightening financial conditions could give the Fed room to maneuver.
Because no new economic projections or dot plot will be released at this meeting, the decision text, any dissenting votes, and Warsh's press conference will carry particular weight. For crypto markets, Cryptonews.net notes that Warsh's comments leaving the door open to further tightening could add pressure on Bitcoin through the dollar and bond yields, while a firmer signal of patience could support risk appetite. The schedule continues on Thursday, October 29, with the September personal income and spending report, which includes the PCE inflation gauge the Fed watches closely.
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