Bitcoin dropped 1.3% to $74,080 and Nasdaq futures fell 0.4% as Fed Governor Waller's hawkish stance on a December rate hike pushed market-implied probability to 96.3%.
Fed governor Waller said he would support a 25-basis-point hike at the Dec. 9 FOMC meeting regardless of Tuesday's CPI, and market odds of a December hike jumped from 76.3% to 96.3%. Tighter policy drains liquidity that crypto depends on, and BTC already fell 1.3% toward $74,080 on Bitstamp. Continued hawkish repricing into the FOMC meeting argues for further downside pressure.
Waller's stated support for a 25-basis-point hike at the Dec. 9 FOMC meeting pushed market-implied odds of a December hike from 76.3% to 96.3%. A higher expected policy rate is supportive for the dollar as yield differentials widen. He said even a softer October CPI (expected +0.3% month-on-month) would not change his vote, limiting room for a dovish reversal.
Nasdaq 100 futures fell 0.4% ahead of the Wall Street open after Waller backed a 25-basis-point December hike, with hike odds jumping to 96.3%. Higher expected policy rates weigh on risk assets and long-duration tech stocks in particular. The move is modest so far, so the Tuesday CPI print at 8:30am ET remains the next test.
Bitcoin fell 1.3% to $74,080 and Nasdaq 100 futures dropped 0.4% after Federal Reserve Governor Christopher Waller signaled support for a 25-basis-point rate hike at the December 9 FOMC meeting. Waller stated his position remains unchanged regardless of the October CPI report, causing market-implied odds for a December hike to surge from 76.3% to 96.3%.
A senior Fed official said he would vote to raise rates by 0.25% at the December FOMC meeting, pushing the market odds of a hike to 96.3%. Higher rates reduce liquidity, which acts as a headwind for crypto, and Bitcoin fell 1.3% toward $74,080.
Probably not much from Waller's side: he said he would still support the December hike even if CPI comes in lower than September. October CPI is expected at +0.3% month-on-month versus September's 0.6%.
It is supportive: Waller said he would vote for a 0.25% rate hike at the December 9 FOMC meeting even if inflation data improves, and markets raised the odds of a December hike from 76.3% to 96.3%. Higher expected rates tend to strengthen the dollar.
Nasdaq 100 futures were down 0.4% ahead of the Wall Street open after Fed governor Waller said he would support a 25-basis-point rate hike at the December 9 FOMC meeting.