XRP Faces Fed Rate Hike Risk as Treasury Yields Surge Despite Record ETF Inflows

XRP held near $1.38 Tuesday despite a sharp rise in Treasury yields and growing expectations that the Federal Reserve could increase interest rates at its September meeting.

The token was almost unchanged over 24 hours but remained down approximately 6.8% over seven days. Its market capitalization stood near $86.4 billion, while 24-hour trading volume fell roughly 26% to $1.78 billion.

That stability is being tested by a rapidly deteriorating macro environment. The benchmark 10-year Treasury yield climbed toward 4.8%, its highest level since January 2025, while the dollar strengthened as rising oil prices revived inflation concerns.

Fed Hike Odds Jump as Bond Markets Sell Off

Fed funds futures now indicate a 68% probability of a September rate increase, up from 35% before Chairman Kevin Warsh’s Jackson Hole remarks, according to Reuters.

Warsh said the Fed would still have “work to do” if inflation failed to cool. Governor Michael Barr added Tuesday that rates may need to rise if price pressures do not decline quickly.

The shift extends the hawkish Fed outlook that began after Jackson Hole. The latest Treasury move also reflects renewed oil-driven inflation fears following escalating U.S.-Iran tensions.