Bitcoin staged a modest rebound Friday morning in the United States after a 10% selloff overnight as the likelihood of a Federal Reserve rate cut in December rose sharply following dovish remarks from New York Fed President John Williams.
“I still see the possibility of further near-term adjustment to the target range for the federal funds rate to bring the policy stance closer to the neutral range,” Williams told the WSJ. “Looking ahead, it is imperative to bring inflation back to our long-term objective of 2% in a sustainable manner. It is equally important to do so without creating undue risks to our maximum employment objective.”
Williams’ comments stand in stark contrast to those of the Fed’s top hawk, Cleveland Fed President Beth Hammack, who yesterday more or less dismissed any concerns about the labor market, choosing instead to focus on inflation and what she sees as a bubbling stock market.
Williams’ comments had an immediate effect as soon as they were released, driving the price of Bitcoin from around $81,000 to over $84,000. It was trading at $83,500 at press time, still down 9.5% in the last 24 hours. Nasdaq 100 futures also posted a 0.35% gain, while they were roughly flat before the remarks.
The odds of a 25 basis point rate cut at the Fed’s December meeting have reached 70%, up sharply from just 39% a day ago, according to the CME FedWatch tool.
