Bitcoin approached the August monthly close below key resistance with markets once again pricing in a Federal Reserve interest-rate hike in September.
Bitcoin (BTC) heads into September still battling key resistance as markets flip hawkish on Federal Reserve policy.
September rate hike bets return after Jackson Hole
The coming week will bring the release of multiple US employment indexes, each likely to shape expectations for policy changes from the Federal Reserve.
The Fed is already in the spotlight after last week’s Jackson Hole economic symposium, which featured its first keynote speech from new chair Kevin Warsh. Warsh remained characteristically tight-lipped on policy cues, describing forward guidance — a fixture of Fed PR for decades — as having “overstayed its welcome.”
On inflation, Warsh described current data as too high, despite July’s lower-than-expected results for the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) index.
“Each of these broad inflation measures have fallen significantly from their highs of a few years ago, but progress through the past couple of years has been more modest, and while this summer’s PCE and CPI readings were better than expected, they do not tell me that underlying trends have meaningfully improved,” he said.
Markets responded with increased expectations of interest-rate hikes, reverting to majority odds for a 0.25% hike at the Fed’s September meeting, per data from CME Group’s FedWatch Tool. At the time of writing, these odds stand at just below 60%, up from 41.4% last week.
Fed target-rate probability comparison for September FOMC meeting (screenshot). Source: CME Group
Rates expectations could be tempered, however, by labor-market numbers. Friday will see August nonfarm payrolls data released. The economy is expected to have added 50,000 jobs last month, compared to a loss of 23,000 in June.
Private-sector employment numbers will precede nonfarm payrolls on Wednesday, followed by initial jobless claims on Thursday.
“All eyes are on the labor market,” trading resource The Kobeissi Letter summarized in commentary on X, noting that this would form the last slew of jobs data before the September rate decision.
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