Bitcoin trades near $77,250 ahead of the Federal Reserve's interest rate decision on Wednesday, September 16. Futures markets aggregated across the CME FedWatch Tool and prediction markets on Kalshi and Polymarket price an 86.5% chance of a quarter-point rate increase.
The pricing shift reflects recent inflation data. Consumer prices rose 0.4% in August following a 0.1% gain in July, lifting the annual inflation rate to 3.4%. The Fed last held rates at 3.50% to 3.75% in July, though three committee members dissented and voted for an increase at that time.
Bitcoin has retreated from recent levels. Hike odds stood at 50/50 on September 4, when the asset traded near $82,000. The asset has since declined several thousand dollars and was roughly flat over the past 24 hours.
Treasury's Role in Market Direction
Custodia Bank CEO Caitlin Long argues that Treasury Department actions may matter more than the Fed decision itself for market conditions. In August, ten-year and thirty-year yields hit twenty-year highs before the Treasury doubled its longer-dated buybacks to $4 billion per operation on August 19. Yields initially declined on the announcement but rebounded within days.
The Treasury buyback program is currently running through November 4, with Secretary Scott Bessent potentially funding operations from a Treasury General Account holding close to $1 trillion.
Digital Dollar Regulation
Long also highlighted a shift in regulatory authority over digital assets. The GENIUS Act, which governs dollar-pegged stablecoins, takes effect on January 18, 2027. Treasury and the Office of the Comptroller of the Currency have published proposed rules, while the Federal Reserve has not yet done so.
Treasury has additionally claimed authority to determine which foreign stablecoins reach American markets. Long expects tokenized deposits—bank dollars operating on blockchain infrastructure—to compete with stablecoins in coming years.
