Bitcoin slips as traders lift July Fed rate hike bets ahead of Inflation report
Bitcoin and other major cryptocurrencies have declined as investors increase bets on a potential Federal Reserve interest rate hike this month. This shift in market sentiment follows hawkish comments from Fed officials and rising oil prices, which have heightened concerns regarding persistent inflation.
Why it matters
The repricing of interest rate expectations highlights how macroeconomic volatility and geopolitical tensions, such as U.S.-Iran conflicts, continue to exert downward pressure on risk assets like crypto.
Bitcoin BTC $ 62,486.86 has dropped by over 2% in 24 hours to $62,380. Ether (ETH), XRP (XRP) and other tokens are also nursing similar losses, according to CoinDesk data.
Money markets now assign roughly a 50% probability to a Fed rate hike this month, according to Bloomberg data, up sharply from about 10% just days ago. The shift follows remarks from Fed Governor Christopher Waller that officials may need to raise rates to bring price pressures under control.
The repricing rippled through fixed-income markets, pushing the two-year U.S. Treasury yield to 4.29%, its highest level since early last year. That part of the yield curve is especially sensitive to shifts in near-term policy expectations.
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