Fed pricing points to four more rate hikes by mid-2027 as bitcoin breaks below $83,000
Treasury yields are hitting multi-year highs across the curve, the dollar index tops 101, and crypto and gold are both under pressure.
Illustration · generated, not a photograph
Traders are betting the Federal Reserve has further to go. Markets now assign the highest probability to a federal funds rate of 4.75% to 5% by June 2027, according to CME's FedWatch tool — a path implying four additional quarter-point increases from the current 3.75% to 4% range, on top of the 25 basis point hike delivered this month.
The repricing is showing up across the U.S. Treasury market. The 10-year yield has climbed above 5.1%, territory last visited in 2007, while the 20-year is nearing 5.5%. Long-duration exposure is taking the damage: TLT, the ETF tracking long-maturity Treasury bonds, has dropped below $80 to record lows.
Rising government borrowing costs are not confined to the United States. Yields have also been pushed higher in France, Germany, the U.K. and Japan.
Bitcoin slipped below $83,000, down from a recent peak of $87,500, as higher yields and a firmer dollar weighed on risk assets. The dollar index has moved above 101 and gained 3% this year. Gold has held just above $4,200, but that still leaves it 25% below the all-time high set in January.
Three forces are behind the yield climb. The U.S. economy keeps outperforming: S&P Global's composite purchasing managers' index, which blends manufacturing and services activity, came in at 58.4 for September — up nearly 4.3% and ahead of forecasts. Middle East tensions have muddied the inflation picture and lifted oil and diesel prices. And issuers are borrowing heavily to bankroll AI infrastructure, swelling the pool of bonds competing with Treasuries for investor money.
The dollar's strength is also being felt in Tokyo. The yen weakened back to 159 against the dollar, reversing a large share of its recovery from around 153 that followed reported intervention in currency markets by Washington and Tokyo last month.
Whether yields and the dollar keep climbing depends largely on how far traders believe the Fed's hiking cycle will run.
Separately, stablecoins are moving into regulated finance, with Asia-Pacific emerging as a major testing ground — a region whose rules, use cases and the role of Ripple's RLUSD token are mapped out in our companion report.
Source reporting
The outlets whose reporting this account was written from.
Written from the reporting and primary documents credited at the foot of this story. Facts are credited to the outlet or document that established them. How Chainpress works
