Traders price in 4 Fed rate hikes by June 2027 as bitcoin slides below $83,000
The four-hike path is the most likely outcome, while rising bond yields and a stronger dollar weigh on bitcoin and gold.
U.S. Treasury yields across the entire curve are pushing to new highs as traders prepare for a longer stretch of tighter monetary policy. CME FedWatch puts the 4.75% to 5% federal funds range as the likely outcome for June 2027.
That would mean four quarter-point hikes from today’s 3.75% to 4% range. Meanwhile, the Federal Reserve has already raised the fed funds rate by 25 bps this month.
The pressure is across the entire Treasury market. The 20-year yield is approaching 5.5%, which has sent the long-bond ETF (TLT), to all-time lows below $80. While the 10-year yield is above 5.1%, levels last seen in 2007. Borrowing costs are rising beyond the U.S. too, with government bond yields under pressure in France, Germany, the U.K. and Japan.
Several factors are pushing U.S. Treasury yields higher. The economy remains strong: the S&P Global composite PMI, which covers manufacturing and services, exceeded expectations in September, rising almost 4.3% to 58.4.