Bitcoin's (CRYPTO: BTC) path forward hinges on the Federal Reserve's Sep. 17 decision, with markets pricing around 30 basis points of easing.
What Happened: Futures point to a high probability of a quarter-point move, while odds of a larger 50 basis point cut have grown, a scenario some analysts say could propel Bitcoin closer to all-time highs.
Data from CME Group's FedWatch tool shows nearly 90% probability of a 25bps reduction and roughly 10% chance of a 50bps move.
Polymarket's $21 million prediction market suggests slightly higher odds for the larger cut, with an 82% chance of a 25bps cut, while a 50bps cut has a 15% chance.
Also Read: Bitcoin, Ethereum, Dogecoin Hold Steady As XRP Slips Ahead Of PPI Data
Why It Matters: The backdrop has shifted sharply in recent months.
U.S. labor figures were revised down by 911,000 jobs through March 2025, the steepest adjustment since 2009, underscoring weakening momentum.
Inflation readings remain mixed, with core CPI at 3.1% in August and core PCE at 2.9% in July, keeping policy debates finely balanced.
Treasury markets reflect expectations of easing at the short end, while longer maturities remain anchored by term premium and fiscal dynamics.
Reuters polling indicates a steeper curve into year-end, with two-year yields projected near 3.40% and 10-year yields around 4.25%, creating a spread close to 85bps.
Even after a cut, policy would sit above the Cleveland Fed's neutral estimate of 3.7%.
Upcoming data releases, such as the CPI on Sep.11 and retail sales on Sep. 16, could tilt the balance between 25bps and 50bps before the Fed convenes.
Bitcoin briefly touched $124,000 in mid-August on easing bets, keeping traders alert to shifts in dollar direction, real yields, and Fed language next week.
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