Bitcoin (BTC) Macro Backdrop Includes Unanimous December Fed Hike Forecast

Elevated U.S. inflation and a unanimous economist forecast for a December Fed rate increase provide context for Bitcoin (BTC) markets as the central bank’s October decision remains pending.

In a survey conducted Oct. 16-20, 94 of 100 economists expected the Federal Reserve to keep its target range at 3.75%-4.00% at its Oct. 27-28 meeting. All 100 forecast a rate increase in December. The results add to earlier coverage of the October hold and December hike outlook, but remain economists’ expectations rather than a policy decision.

The Fed raised its target range by 0.25 percentage point in September, in a 12-0 vote, to its current level. Its next scheduled meetings are Oct. 27-28 and Dec. 8-9.

Inflation figures for September show consumer prices up 3.7% from a year earlier. Prices excluding food and energy rose 2.6%, while the energy index increased 20.4%. Gasoline prices climbed 34.2% over the same 12-month period.

The survey also asked economists where they expected the federal funds rate to peak. Nearly 60% of those who answered saw a peak of 4.00%-4.25%, and 38 of 92 expected at least two more increases.

Michael Gapen, Morgan Stanley’s chief U.S. economist, said, “The risks are in the direction of a Fed that ultimately needs to hike rates more than we expect.”

The survey and inflation data describe the policy backdrop for Bitcoin; they do not establish a specific price response or confirm what the Fed will do. The October meeting is next, with the December meeting scheduled for Dec. 8-9.