19 of 22 Wall Street Firms Expect Fed Rate Hike as Crypto Faces Fresh Pressure

• Fed rates hike expectations are adding crypto pressure, with the Bitcoin price and wider crypto market facing uncertainty ahead of the Federal Reserve decision
• 19 of 22 major Wall Street firms reportedly expect a September rate increase, although forecasts differ on the size of the move
• The CLARITY Act setback has added another source of pressure as traders assess the outlook for crypto regulation and monetary policy

The Fed rate hike has become a center of global markets, as the sectors are now preparing for the Fed’s hawkish stance. The crypto market is already reeling under pressure as bitcoin declined 4% in response to the Fed’s September rate cut decision. Markets are widely anticipating that the Federal Reserve may end up raising rates on September 16, as persistent inflation remains a key area difficult to ignore. If this happens, this would be the first rate hike in the US in three years. Alongside that, major US banks such as JPMorgan, Goldman Sachs, Bank of America are also expecting a 25 basis points increase. 

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19 Out Of 22 Banks Are Expecting A Rate Hike In September 

Per a latest reports, nearly 19 out of 22 leading banks are preparing for a Fed rate hike stance. Major Wall Street institutions including JPMorgan, UBS,and Morgan Stanley are all expecting a fed rate hike of 25 to 75 basis points this month. Banks like Morgan Stanley are also expecting another quarter point increase in December.

One of the primary reasons pushing this expectation forward is the rising inflation. August inflation and producer price data has appeared stronger than expected, with oil prices moving beyond $100 a barrel. This has raised concerns that energy costs will stay up in the future, keeping inflation statistics elevated. This development is making it harder for the Federal reserve to keep the rates stable for now. 

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Crypto Market Instability Rises

The rate hike decision expectations are adding more woes for Bitcoin price. The asset has already been reeling under pressure, as the Clarity act failed to progress in the US senate.  In response to this, bitcoin has been trading lower, falling about 2.85% in the last 24 hours. XRP has also declined in the process, dropping nearly 9% with Solana declining by 5%. 

Higher interest rates often make safe yield bearing assets look more attractive. The development is negative for risk or speculative assets, which can be a leading factor weighing heavily in the cryptocurrency industry. 

What May Happen Next?

The Federal Reserve or Fed Hike stance is the latest focus of the markets. The markets have already been pricing in to accommodate this change. Investors are also keenly watching the decision, and may also pay attention to Central banks language and projections to make future decisions. 

For Bitcoin, a 25 basis points hike event may bring some volatilty, but broader market sentiment also plays a crucial role in determining its future price pace, adding more to the existing crypto pressure.

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