BREAKING: Bitcoin Rises as Fed’s Williams Eases Rate Hike and Inflation Concerns

New York Fed’s President John Williams on Wednesday said long-term bond yields are rising due to a solid economy, not inflation fears. His wait-and-see comments on a potential rate hike provided some relief after last week’s hawkish signals from Fed Chair Kevin Warsh. This helped Bitcoin rebound back above $77,000.

Fed’s Williams Sees Strong Economy and Lower Inflation

Williams told CNBC that he sees no clear evidence yet that current policy is insufficient to bring inflation back to the 2% target. He attributed the recent Treasury bond yields primarily to a strong U.S. economy and heavy investment in AI and technology rather than inflation concerns.

He claimed high oil prices due to the U.S.-Iran war and tariffs remain key drivers of inflation. However, he noted signs of easing inflation. He added that the labor market is solid and the Fed needs more data before its next rate decision.

According to the latest CME FedWatch Tool data, traders assign roughly a 66% probability to a 25bps rate hike at the September FOMC meeting, with the chances of rates remaining unchanged rising.

Notably, odds of a rate hike surged in recent days following Fed Chair Kevin Warsh’s Jackson Hole remarks on inflation still remaining high.