Fed Expected to Cut Rates by 25 Basis Points on Sept. 17

Key Points:

The U.S. Federal Reserve is expected to cut interest rates by 25 basis points on Sept. 17, potentially decreasing the rate to around 3% within a year.
Bitcoin enthusiasts hope this will lower Treasury yields and increase risk-taking in markets.
However, long-term Treasury yields might stay high due to fiscal concerns and persistent inflation.
The U.S. government plans to increase debt issuance to finance tax cuts and defense spending, potentially increasing yields further.
Inflation rose to 2.9%, complicating expectations for faster Fed rate cuts.
The 10-year Treasury yield fell to 4%, but analysts suggest this might be an overshoot.
Historically, similar scenarios saw yields bounce back after initial drops, driven by economic resilience and fiscal issues.

Implications for Bitcoin:

Bitcoin surged despite rising yields in late 2024 due to pro-crypto policies and corporate adoption.
This optimistic narrative has weakened, suggesting potential future challenges for Bitcoin prices if yields rise again.

For more details on factors impacting Bitcoin's trajectory, refer to the full analysis here.