The Federal Reserve’s September meeting is no longer centered on whether it will raise rates. The debate has shifted to how many hikes could follow.
Goldman Sachs has abandoned its earlier forecast for no move in September and now expects the Fed to raise rates by 25 basis points at its Sept. 15-16 meeting. JPMorgan has gone further, projecting another 25-basis-point increase in December.
Based on the latest pricing in rate futures, markets are assigning about an 87% probability to a 25-basis-point hike in September, up from roughly 70% before the latest inflation figures were released. For Bitcoin, that changes the focus. The immediate risk may no longer be a surprise move from the Fed, but whether markets are underestimating the chance that rates will still be moving higher into late 2026.
Goldman joins the hawkish camp
The shift at Goldman was sharp. In mid-August, Goldman Sachs chief economist Jan Hatzius still said the odds of a September hike were “very low,” citing softer employment, retail sales and inflation data. At that point, market pricing had pushed the implied probability of a hike down to about 30%.
That view changed after a new round of data. U.S. August producer price index, or PPI, rose 0.4% month over month and 5.4% year over year. Within that report, final demand goods prices climbed 1.1% in a single month, energy prices increased 4.2%, and diesel prices jumped 24.1% over the month.
At the same time, tensions in the Middle East pushed energy costs higher again. Brent crude rose to around $107.6 a barrel on Monday. With energy prices back above $100, markets began to worry that the decline in inflation could stall.
Goldman now expects a 25-basis-point hike in September. Economist David Mericle said the Federal Open Market Committee, or FOMC, may not want to surprise markets when expectations for a hike are already heavily priced in.
The federal funds target range currently stands at 3.50% to 3.75%. A 25-basis-point increase would lift that range to 3.75% to 4.00%.
Why 87% is not the only number that matters
An 87% probability for a September hike is high, but the report says Bitcoin investors should pay closer attention to what comes after September.
Citing rate futures, The Wall Street Journal reported that as of Sept. 11, markets were pricing about a 97% chance of at least one hike by year-end. More importantly, JPMorgan has formally forecast 25-basis-point hikes in both September and December and raised its estimate for the long-run policy rate to 3.25%.
If a September move has already been absorbed, the bigger repricing catalyst on Wednesday may be Fed Chair Kevin Warsh’s guidance for November, December and 2027.
Bitcoin has slipped back toward $77,000
Bitcoin has come under pressure again as monetary policy expectations turned more hawkish. According to Coinbase data, BTC was trading at about $77,070, down about 1.5% over the past 24 hours and about 5% over the past week. Its market capitalization stood at about $1.55 trillion.
That also leaves Bitcoin well below the level it reached in early September, when it briefly broke above $82,000. On Sept. 3, Bitcoin moved past $82,000, but later fell back toward the $77,000 area as U.S. employment data, PPI and CPI all fed expectations for tighter policy.
On Sept. 7, markets were still assigning only about a 60% chance to a September hike, while Bitcoin traded near $79,500. Now, with hike odds at 86% to 87%, Bitcoin has not seen a much sharper sell-off. The article says that suggests a significant part of the September hike risk has already been priced in.
Under that reading, a straightforward 25-basis-point increase this week may not, by itself, create a new bearish shock.
The larger threat is higher for longer
For Bitcoin, the impact of rates does not come only from the size of a single move. It runs through Treasury yields, the U.S. dollar and overall financial liquidity.
Long-dated Treasury yields are already sitting near multi-year highs. The 10-year Treasury yield recently climbed to its highest level since 2023, while the 30-year yield briefly reached about 5.36%, near its highest point since 2004.
If the Fed signals that another hike in December is still possible, markets could push the entire yield curve higher. The report lays out three channels of pressure for Bitcoin:
- Higher risk-free rates raise the opportunity cost of holding Bitcoin, which does not generate cash flow.
- Higher rates and a stronger dollar usually tighten global dollar liquidity.
- Rising Treasury yields can also weigh on technology stocks and other richly valued risk assets, weakening risk appetite across crypto markets.
That means even if September is mostly in the price, Bitcoin could still face a second round of valuation pressure if expectations for a December hike shift from a possibility to a base case.
Goldman still sees two rate cuts in 2027
Even while calling for a rate hike this week, Goldman still expects the Fed to cut rates twice in 2027, though later than it had previously forecast. The bank said the shift toward a September hike was driven in part by market pricing and did not necessarily reflect a fundamental change in its longer-term inflation view.
Goldman Sachs Asset Management said in its latest market outlook that core PCE inflation could still gradually move back toward 2% in 2027, with price pressure from energy, tariffs and some supply factors potentially fading over time.
That creates an important scenario for Bitcoin. A September hike does not automatically mean a fresh long tightening cycle has begun. If the Fed is delivering one or two “insurance” hikes and still turns back to cuts in 2027, Bitcoin’s medium-term liquidity backdrop may not keep worsening once markets finish repricing the year-end rate path.
Three things to watch at this week’s FOMC meeting
The report says the most important signals from this week’s FOMC meeting may not be the 25 basis points themselves, but three other points:
- whether Kevin Warsh signals that further hikes are still needed;
- how the latest dot plot changes the expected policy rate for late 2026;
- whether the Fed treats the recent rise in oil prices as temporary or as a risk that could reignite inflation.
If the Fed raises rates by 25 basis points but also signals it can pause afterward, markets could still react with a sell-the-rumor, buy-the-news move. If, instead, a second hike in December increasingly becomes the baseline case and Treasury yields and the dollar stay elevated, Bitcoin at around $77,000 may still not fully reflect the liquidity pressure implied by the year-end path.
In that framework, the 87% probability of a September hike may no longer be Bitcoin’s biggest risk. What matters more for fourth-quarter pricing is where the Fed ultimately takes rates and how long it keeps them there.