A few hours before the Fed’s decision, more than a dozen banks are betting on a rate increase of 25 basis points, an outcome currently credited with a probability of 87.3% by the market. The main causes are more stubborn inflation than expected and an oil price above 100 dollars. Faced with such hardening expectations, BTC is moving around $76,000, after having exceeded $79,000. The verdict of Wednesday September 16 should reshuffle the cards.
In brief
- Wall Street expects a rate hike of 25 basis points.
- Major banks revised their forecasts before the Fed’s decision.
- The probability of an increase now reaches 87.3%.
- Persistent inflation reinforces expectations of monetary tightening.
- Bitcoin Falls to $76,000 Before Fed Verdict.
Major US banks rally behind the scenario of a rate hike
The consensus has clearly shifted. Many banking institutions like UBS, HSBC, Barclays, Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, Bank of America and JPMorgan Chase have anticipated a 25 basis point hike this week.
JPMorgan and Goldman Sachs are even abandoning their status quo scenario in order to bet on an increase this September. HSBC also plans an increase in December, while Deutsche Bank has considered movements in September, December and March 2027.
Forecasts also differ on the scope of the cycle. Bank of America projects 75 basis points of increase in 2026, compared to 50 basis points of tightening by the end of this year for UBS. Morgan Stanley foresees two increases and also projects a movement by the ECB in the short term. Citigroup, Wells Fargo and Piper Sandler have also anticipated intervention by the Fed in September.
The main projections then outline various trajectories:
- JPMorgan and Goldman Sachs : the abandonment of the status quo and an increase of 25 basis points expected in September;
- HSBC: increases expected in September and December;
- Deutsche Bank: increases expected in September, December and March 2027;
- Bank of America: 75 basis points of increases planned in 2026;
- UBS: 50 basis points of tightening anticipated by the end of the year.
The persistence of inflation has changed Wall Street’s expectations
Such a shift comes after firmer than expected macroeconomic statistics. During the month of August, the core CPI evolved by 0.3% over one month, against a consensus of 0.2%. PCE inflation rose to 3.7%, while the price of oil rose above $100 per barrel.
Also, Fed Chairman Kevin Warsh had warned in Jackson Hole:
We need to be confident that core inflation is moving towards our target, clearly and at a sufficient pace. Otherwise, we still have work to do.
From then on, the markets adjusted their positions in the same direction. CME FedWatch now estimates the probability of a quarter-point increase on September 16 at 87.3%, compared to 61.9% at the end of August.
Thus, the rate targeted by the Fed Funds is between 3.50% and 3.75%. However, Anthony Pompliano defends a contrary reading. For him, ideally, “the Federal Reserve should NOT raise interest rates”.
Bitcoin remains below $80,000 before Fed decision
On September 14, bitcoin crossed $79,000 in the crypto market, triggering more than $100 million in short position liquidations in 30 minutes. Then the momentum petered out and BTC fell to around $76,300 due to the Senate’s rejection of the CLARITY Act.
Many analysts have identified the area between $79,500 and $80,000 as a range where selling pressure would build. Bitcoin has already failed multiple times before $80,000 this month.
Surprise inflation earlier in September had already caused $562 million in liquidations. The FOMC began its two-day meeting on Tuesday, September 15. The monetary decision will be announced on September 16. However, the 87.3% of the CME FedWatch remains an anticipation, not a certain decision.
Bitcoin therefore approaches this deadline under a resistance that it has not managed to overcome sustainably, while large banking institutions have largely repositioned themselves in favor of a further increase in rates.
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