BTC Holds Steady as Fed Rate Cut Looms, Rising Treasury Yields Suggest Caution: Analysts
The Federal Reserve is expected to cut the target interest rate by 25 basis points to a range of 3.50%-3.75% on Wednesday, marking the third consecutive cut since September 2024, totaling 175 basis points of easing. In anticipation of this move, Bitcoin's price rose, trading around $91,800 with intraday highs near $92,175, up over 1.5% on the day.
Meanwhile, the 10-year U.S. Treasury yield reached 4.15%, the highest since November 20, increasing by about 2 basis points on the day and nearing a 20 basis-point rise since November 28. This rise has led some observers to caution that a hawkish tone in Chair Powell's post-cut press conference could negatively impact risk assets and signal limited further easing in 2026.
Analysts from ING anticipate a slower pace of rate cuts next year due to tensions between inflation reports and labor market data. The most dovish scenario they foresee is a second rate cut in 2026, though this is considered unlikely.
Jeff Anderson of STS Digital highlighted that yields fluctuating around 4% have drawn attention towards Japanese yields and potential rate hikes in December, as well as the possibility of Federal Reserve purchases of Treasury bills and other reserve-management actions. There is speculation that the Fed might announce such reserve-management purchases of short-term Treasuries or T-bills this week.
