Key Takeaways
- Nine major Wall Street institutions are expecting a hike this week.
- CME Fedwatch priced an 87.3% chance of a quarter-point hike at the Fed’s Sept. 16 decision.
- Bitcoin’s price is hovering near $76,700 today after shorts lost $100 million in 30 minutes yesterday.
The List
UBS, HSBC, Barclays, Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, Bank of America and JPMorgan Chase all expect the Federal Reserve to lift rates by 25 basis points (bps) this week.
What Flipped Wall Street
August’s core consumer price index (CPI) rose 0.3% month-on-month against a 0.2% consensus. At Jackson Hole, Warsh had already warned:
We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.
In this regard, personal consumption expenditures (PCE) inflation is running at 3.7% while oil has pushed back above $100 a barrel. Markets have followed the banks, with the CME Fedwatch tool putting September hike odds at 87.3%, up from 61.9% at the end of August. The federal funds target currently sits at 3.50% to 3.75%.
Bitcoin maxi Anthony Pompliano, however, is not on board with the banks and posted that ideally “the Federal Reserve should NOT raise interest rates,” a take that drew substantial public backing.
Where Bitcoin Sits Amidst All This Chatter
The Federal Open Market Committee (FOMC) starts its two-day meeting on Sept. 15, the same day as the Senate’s CLARITY Act cloture vote, with the rate decision due on Sept. 16. In all of this, crypto seems to be heading in hot, with bitcoin crossing $79,000 yesterday as more than $100 million in shorts were liquidated in 30 minutes.
However, since then the asset’s price has slipped back to about $77,000, with many analysts flagging $79,500 to $80,000 as a key area where selling pressure should build. Bitcoin’s price has failed at $80,000 repeatedly this month, and an inflation surprise earlier in September already triggered $562 million in liquidations.
