Bitcoin, ETH, XRP Rally Under Threat As September 16 Fed Rate Hike Odds Surge To 86%

Bitcoin, Ethereum and XRP brace for a new macroeconomic challenge as the odds of a Fed rate hike at its meeting on September 16 have surged.

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According to the CME FedWatch tool, the probability of a 25 bps hike in the Fed’s target range from 350-375 to 375-400 has increased to 86.5%. The probability was around 70% before the latest inflation report. It would be the first increase in three years, and traders are also factoring in further increases.

The turnaround came after data revealed that the U.S. CPI inflation increased 3.4% in August from a year ago. This has weighed on the Bitcoin and overall crypto market decently.

However, the market outlook is not entirely in line with the economists. A Bloomberg survey of Fed policy makers showed that few economists anticipated any changes in the rate at their Sept. 15-16 meeting or on their next rate decision in December 2027. Fewer than 13 percent of the 48 who responded predicted an increase this month.

Meanwhile, Bitcoin’s technicals are still leaning towards a continuation higher, albeit there are increasing chances of a Fed rate hike. Crypto analyst Michaël van de Poppe wrote on X, “#Bitcoin is in the stage where you’d want to see a slight consolidation here.”