Analysts expect more Fed rate hikes as Bitcoin slips below $70,000

what happened

SEB strategist Jussi Hiljanen argues that strong U.S. growth shows current policy is not restrictive, so the Fed still has more tightening to do. He expects 25 basis point hikes in December and March, with the 10-year Treasury yield staying near 5%. It stood at 5.122% on Tradeweb.

Westpac's chief economist Luci Ellis thinks the Reserve Bank of Australia is likely finished cutting rates, while downside risks to growth and the labor market are building. Bitcoin dropped below $70,000 to its lowest level in nearly three months, and Ethereum slipped under $2,000. ETF outflows and MSCI's decision to remove Strategy from its indexes added pressure.

In Japan, according to Market Talk, the 10-year JGB yield rose to 2.865% after the overnight rise in U.S. yields, while the Nikkei traded near 61,500.

why it matters

Expectations of tighter U.S. policy reduce the appeal of non-yielding assets such as Bitcoin and support higher bond yields. Investors are watching Fed rate expectations, which feed into the dollar and equity valuations.

market impact

Bitcoin and crypto: rate-hike expectations weigh on demand for risk assets; US Treasuries: rising yields push prices lower.

• ▼Bitcoin pressure down — rate-hike expectations reduce the appeal of non-yielding assets
• ▼US Treasuries pressure down — expectations of tighter Fed policy push yields up and prices down

tags

instruments