bitcoin staged a modest rally Friday morning in the US after a 10% sell-off overnight, as the likelihood of a Federal Reserve rate cut in December rose sharply following dovish comments from New York Fed President John Williams.
“I still see room for further tightening in the near term to the federal funds rate target range to move the policy stance closer to the neutral range,” Williams told the WSJ. “Looking ahead, it is imperative to restore inflation to our long-term target of 2% on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment goal.”
Williams’ comments stand in stark contrast to those of the Fed’s leading hawk, Cleveland Fed President Beth Hammack, who yesterday more or less dismissed any concerns about the labor market, preferring to focus on inflation and what she believes is a bubbling stock market.
Williams’ comments had an immediate effect hitting the tape, sending 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, down from roughly flat before the comments.
The odds of a 25 basis point rate cut at the Federal Reserve’s December meeting soared to 70%, up from 39% a day ago, according to the CME FedWatch tool.
