New York Fed President John Williams, the second-ranking official on the Federal Reserve’s rate-setting committee, pushed back on an October rate hike. The Fed has “no need for urgency,” he said.
Last week, markets predicted a 70% probability of an October rate hike. Today, it has dropped below 50%. What does this mean for Bitcoin and the wider crypto market?
Fed Can Wait After September’s Hike
The Fed raised its benchmark rate by a quarter point on September 16. This increased the borrowing costs for everything from mortgages to business loans.
Williams is vice chair of the Federal Open Market Committee (FOMC), the group that votes on rates. He spoke at the University at Buffalo.
“With the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information,” said Williams.
He still called 3.7% inflation “unquestionably too high.” He added that one more hike “may be appropriate late this year.” The Fed’s two remaining meetings of 2026 fall on October 28 and December 9.
Traders took the hint. According to CME FedWatch, which turns futures prices into odds, the chance of an October hike is now close to a coin flip. Weeks ago, it was well above 70%.
Fed Governor Says More Rate Hikes Are Likely Needed
Fed Governor Michael Barr spoke at the Detroit Economic Club and sounded less patient. He tracks core PCE, the Fed’s preferred inflation gauge, which leaves out food and energy prices.
Over the past 20 months, he counted only two months when that gauge was in line with 2%.
“In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion,” Barr said.
He said part of the pressure comes from spending on artificial intelligence (AI), which is pushing up chip prices.
Why Bitcoin Is Not Off the Hook Yet
Higher rates pay savers more on cash and bonds. That can pull money out of riskier assets like Bitcoin.
A delay would give risk assets more time. However, neither Williams nor Barr ruled out another hike this year. Williams pointed to “late this year,” and Barr said more increases are likely.
Bitcoin has held up so far. BeInCrypto reported that it rose 13% after the hike as institutional funds bought back in. Today, it rose just 0.2% over 24 hours, data shows.
The next test comes on Wednesday with August PCE inflation data, one of this week’s key catalysts. A hot reading could push the October odds back toward the 70% level they hit on Monday.
