Bitcoin Stalls Below $80,000 Before the Fed Verdict

A few hours before the Fed decision, more than a dozen banks are betting on a 25 basis point rate hike, an outcome currently credited with an 87.3% probability by the market. The main causes are more persistent inflation than expected and an oil price above 100 dollars. Faced with such a tightening of expectations, BTC is trading around 76000 dollars, after having exceeded 79000 dollars. The verdict on Wednesday, September 16, should reshuffle the cards.

In brief

• Wall Street anticipates a 25 basis point rate hike.
• Major banks have revised their forecasts ahead of the Fed decision.
• The probability of an increase now reaches 87.3 %.
• Persistent inflation strengthens expectations of monetary tightening.
• Bitcoin falls to 76000 dollars ahead of the Fed verdict.

Major American banks rally behind the scenario of a rate hike

The consensus has clearly shifted. Many banking institutions such as UBS, HSBC, Barclays, Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, Bank of America, and JPMorgan Chase have anticipated a 25 basis point increase this week.

JPMorgan and Goldman Sachs have even abandoned their status quo scenario to bet on an increase as early as this September. HSBC also projects a hike in December, while Deutsche Bank has envisaged movements in September, December, and March 2027.

Forecasts also differ on the scale of the cycle. Bank of America projects 75 basis points of increases in 2026, against 50 basis points of tightening by the end of this year for UBS. Morgan Stanley forecasts two hikes and also projects a short-term ECB move. Citigroup, Wells Fargo, and Piper Sandler have also anticipated a Fed intervention in September.

The main projections then outline various trajectories :

• JPMorgan and Goldman Sachs: abandoning the status quo and expecting a 25 basis point hike in September ;
• HSBC: hikes expected in September and December ;
• Deutsche Bank: expected hikes in September, December, and March 2027 ;
• Bank of America: 75 basis points of hikes expected in 2026 ;
• UBS: 50 basis points of tightening expected by the end of the year.

Persistent inflation has changed Wall Street expectations

Such a shift comes after firmer than expected macroeconomic statistics. During August, the core CPI evolved by 0.3% month-over-month, against a consensus of 0.2%. The PCE inflation rises to 3.7%, while the oil price has risen above 100 dollars a barrel again.

Also, Fed Chairman Kevin Warsh had warned at Jackson Hole :

We need to be sure that underlying inflation is approaching our target, clearly and at a sufficient pace. Otherwise, we have work to do.

Thereafter, markets have adjusted their positions in the same direction. The CME FedWatch now estimates an 87.3% probability of a quarter-point hike on September 16, against 61.9% at the end of August.

Thus, the rate targeted by Fed Funds is between 3.50% and 3.75%. However, Anthony Pompliano argues a contrary view. For him, ideally, “the Federal Reserve should NOT raise interest rates”.

Bitcoin remains under $80000 before the Fed decision

On September 14, bitcoin crossed 79000 dollars on the crypto market, triggering more than 100 million dollars worth of short position liquidations in 30 minutes. Then, the momentum faded and BTC dropped to around 76300 dollars due to the Senate rejecting the CLARITY Act.

Many analysts identified the range between 79500 and 80000 dollars as a zone where selling pressure would increase. Bitcoin has already failed multiple times in front of the 80000 dollars this month.

A surprise inflation earlier in September had already caused 562 million dollars of liquidations. The FOMC began its two-day meeting on Tuesday, September 15. The monetary decision will be announced on September 16. However, the CME FedWatch’s 87.3% remains an anticipation, not a guaranteed decision.

Therefore, bitcoin approaches this deadline under resistance it has not managed to pass sustainably, while major banking institutions have largely repositioned in favor of another rate hike.