On September 11 in Beijing time, the U.S. Bureau of Labor Statistics will release the August Consumer Price Index (CPI) report. This will be the final key inflation data point before the Fed’s FOMC meeting on September 15–16. The CME FedWatch tool shows that the market-implied probability of a 25-basis-point rate hike is nearing 60%. Meanwhile, the yield on the 10-year U.S. Treasury has repeatedly pushed above the 4.8% level, hitting a new high since November 2023. The macro narrative is undergoing a critical shift.
Why August CPI becomes the "tipping point" for whether the Fed hikes in September
The August nonfarm payrolls data came in far above expectations: 162,000 new jobs were added, nearly triple the 53,000 expected. This lifted the Fed’s probability of a September rate hike from about 30% previously to above 50%. Fed Chair Powell’s hawkish remarks at the Jackson Hole Global Central Bank Conference further reinforced that outlook.
Against this backdrop, the importance of the August CPI data has been amplified to a decisive level. Wall Street economists broadly expect total CPI to rise 0.4% month over month in August, up from 0.1% in July, with the year-over-year increase holding steady at 3.4%. Core CPI is expected to rise 0.2% month over month, unchanged from July, while the year-over-year rate is forecast to slip from 2.5% to 2.4%. Citic Securities expects total CPI to increase 0.35% month over month and 3.4% year over year.
These small differences in the forecast numbers themselves don’t matter as much as whether the data prints above or below expectations. If inflation comes in hotter than expected, hawkish voices will intensify and help lock in the rate-hike path. If the data cools, dovish arguments may support holding rates steady for a sixth consecutive time. Powell has been explicit that the burden of proof has shifted—only a "very meaningful CPI downside surprise" could prevent the Fed from returning to hiking.
What the 4.8% Treasury yield is signaling to the market
The 10-year U.S. Treasury yield is a core anchor for global asset pricing. When it breaks above 4.8%—the prior peak set in January 2025—the message goes far beyond the bond market itself.
Matt Malley, Chief Market Strategist at Miller Tabak + Co., noted that if the 10-year Treasury yield keeps holding above 4.8%, "it will be especially concerning." This may indicate that market anxiety is moving beyond policy management—borrowing costs are being driven by fiscal pressure. With the U.S. budget deficit running high and national debt now exceeding $40 trillion, from now through the end of the year, more than $840 billion in U.S. Treasuries will need to be rolled over. Structural supply-side pressure is pushing long-term yields higher and keeping them there.
Treasuries across different maturities are moving in different directions. The 2-year yield is trading more around expectations for near-term Fed hikes, while the 30-year ultralong bond’s trading focus shifts toward long-term inflation, fiscal pressure, and global geopolitical conditions. This divergence alone suggests that the 4.8% 10-year yield is not driven purely by rate-hike expectations—it also reflects deeper market concerns about the sustainability of U.S. fiscal policy.
From 30% to 60% rate-hike odds: How market expectations completed an "openly hawkish reversal"
Tracing the timeline of this expectation reversal helps explain the logic behind current market pricing.
On August 26, CME FedWatch showed a 63.9% probability that the Fed would keep rates unchanged in September, with only a 36.1% probability of a 25-basis-point hike. After Powell’s hawkish remarks at Jackson Hole, the hike probability jumped from roughly 30% to above 50% within just a few hours. In early September, after the August nonfarm payrolls report was released, the probability rose further to around 60%. Afterwards, it has oscillated in the 58% to 60% range.
The speed and magnitude of this expectation reversal are worth noting. Goldman Sachs has taken a cautious view, arguing that if the month-over-month core CPI increase in August lands around 0.2% as expected, it would not be enough to justify the policy response implied by Powell’s comments. But the market’s pricing logic has already changed. Under Powell’s hawkish framework, the market’s sensitivity to inflation data has been significantly heightened. Regardless of whether the Fed ultimately hikes, the market has already repriced the "likelihood of a hike."
How a higher-rate environment is reshaping crypto asset valuation logic
The valuation logic for crypto assets is undergoing a structural reset. The core driver of this reset is not the rate hike itself, but a systematic rise in the risk-free rate level.
When the 10-year Treasury yield reaches 4.8% and the 30-year yield touches 5.25%, the opportunity cost of holding non-yielding assets like Bitcoin increases materially. In a high-yield environment, investors tend to allocate more toward lower-risk fixed-income assets. Historical data shows that Bitcoin and the 10-year Treasury real yield often move in a negative relationship.
The transmission chain is direct: rising interest rates lift the U.S. dollar, raise real yields, and reduce risk appetite. The correlation between Bitcoin and the Nasdaq 100 has remained elevated into 2026, meaning tightening financial conditions often pressure both stock and crypto markets at the same time. UBS’s hawkish reversal further extends this pressure window: the firm expects the Fed to execute two more rate hikes this year, implying downward pressure on Bitcoin could persist through December.
But the market is not driven by a single narrative. Some investors view the continuously widening U.S. budget deficit—which is expected to exceed $2 trillion this year, or about 6% of GDP—as a reason to hold assets with a fixed supply. Bitcoin’s relative resilience amid this macro headwind is the result of these two narratives intertwining.
Where does Bitcoin’s resilience at the $79,000 level come from?
As of September 9, 2026, based on Gate data, BTC/USDT is trading at $79,032. Bitcoin previously pulled back from above $82,000. After the crypto market’s total market cap hit a near-term high of $2.73 trillion on September 3, it showed clear signs of stalling.
Bitcoin’s ability to hold the $79,000 level despite macro headwinds is supported by multiple factors. Spot Bitcoin ETFs have continued to record net inflows. Last week alone, they logged $987 million in net inflows, marking a third consecutive week of positive flows. The durability of institutional demand provides underlying support for Bitcoin.
At the same time, market breadth remains weak. Large tokens are broadly under pressure, and capital has not rotated massively from Bitcoin into other crypto assets. Bitcoin’s market share is close to 59%, indicating that funds remain concentrated in BTC. Ethereum is holding near $2,500, with relatively stable performance. However, with the rate-hike probability staying high, the broader crypto market is in a "wait-and-see" mode—traders are looking for clearer direction from CPI data and the FOMC decision.
Three FOMC decision scenarios and their impact on the market
Based on current data, we can outline three scenarios for how markets may evolve after the September FOMC meeting.
Scenario 1: CPI beats expectations + a rate hike is delivered. If the August CPI data comes in above expectations, a 25-basis-point hike is nearly a sure thing. Short-term Treasury yields are likely to keep rising, and the dollar will likely strengthen. Risk assets would face broad pressure, and Bitcoin may retrace into the $75,000 to $76,000 range. But some analysts believe that after the FOMC meeting, crypto markets and even the broader stock market could kick off a rebound—"sell the rumor, buy the fact" has shown up repeatedly in past FOMC cycles.
Scenario 2: CPI matches expectations + rates on hold. If inflation data broadly aligns with expectations, the Fed may choose to keep rates unchanged for the sixth consecutive time. A drop in rate-hike expectations could trigger a rebound in risk assets, and the total crypto market cap could retest above $2.8 trillion. Still, the hawkish leaning in the dot plot—June’s dot plot shows nine officials expect at least one rate hike from 2026 onward—means "on hold" only delays, rather than cancels, future hikes.
Scenario 3: CPI below expectations + a shift to dovishness. If inflation falls more than expected, the Fed could deliver a clear pause-hike signal. This would be the most favorable scenario for crypto assets and could push Bitcoin to retest $82,000 or even higher levels. However, Powell’s hawkish framework suggests that even if August CPI misses expectations, the Fed is unlikely to pivot to dovishness quickly.
The long-term logic for crypto assets amid a macro narrative shift
Near-term macro headwinds should not obscure the deeper structural changes crypto assets are going through.
Rising Treasury yields are not just a monetary-policy phenomenon. They also reflect a repricing of U.S. fiscal sustainability by the market. If the 4.8% 10-year yield continues to hold, it means a "fiscal dominance" regime is taking shape. Under this regime, the risk premium required by investors to hold long-dated government bonds will keep increasing.
For crypto assets, this means two forces pulling against each other. On one side, a higher nominal risk-free rate suppresses risk appetite and raises the opportunity cost of holding. On the other side, doubts about the sustainability of fiscal and monetary policies actually strengthen the safe-haven narrative of Bitcoin as a "fixed-supply asset." Bitcoin’s relative resilience in this macro headwind is the product of this dynamic balance.
Summary
August CPI will be released on September 11. It will be the last key inflation indicator before the FOMC meeting. The market currently prices the probability of a 25-basis-point Fed hike at about 60%, while the 10-year Treasury yield keeps oscillating around the 4.8% level. The macro environment is at a critical turning point—CPI results will directly determine whether a hike is carried out, and the direction of Treasury yields will strongly affect the valuation logic of all risk assets, including crypto. Bitcoin shows some resilience around $79,000, but the real test may come after the CPI release and the FOMC decision are finalized.
FAQ
Q1: When will the August CPI data be released? What impact will it have on the September FOMC meeting?
U.S. August CPI data will be released on September 11 (Friday) at 20:30 Beijing time. This report is the final key inflation data point before the Fed’s FOMC meeting on September 15–16. If inflation is higher than expected, it will reinforce the rate-hike path. If the data cools, it could support the Fed staying on hold.
Q2: What does the 60% rate-hike probability shown by CME FedWatch mean?
The CME FedWatch tool calculates rate-hike probabilities based on federal funds futures trading data. A 60% probability means the market sees a greater-than coin-flip chance of a 25-basis-point hike, but it has not formed a consensus. This probability jumped quickly from about 36% at the end of August to around 60%, reflecting both the August nonfarm payrolls surprise and Powell’s hawkish remarks.
Q3: What does a 10-year U.S. Treasury yield above 4.8% mean for crypto assets?
The 10-year U.S. Treasury yield is a core anchor for global asset pricing. When the risk-free yield reaches 4.8%, the opportunity cost of holding non-yielding assets like Bitcoin rises materially. Historical data shows Bitcoin and U.S. Treasury real yields often have a negative relationship. On the other hand, the widening U.S. fiscal deficit and growing debt also strengthen Bitcoin’s "fixed-supply asset" safe-haven narrative.
Q4: How large are the crypto and stock asset offerings Gate currently supports?
Gate supports trading of 5,100+ crypto assets and 12,800+ stock assets, covering a wide range of major and emerging coins to meet diverse investment needs. Gate’s user base has surpassed 60 million.
Q5: How might the crypto market perform after the FOMC meeting?
There are three main scenarios. If CPI beats expectations and a hike is delivered, risk assets may face near-term pressure, and Bitcoin could retrace into the $75,000 to $76,000 range. If CPI matches expectations and the Fed stays on hold, risk assets could rebound. If CPI comes in below expectations and the Fed signals a dovish pivot, that would be the most favorable scenario for crypto assets. But regardless of the scenario, once the FOMC decision lands, the market’s "sell the rumor, buy the fact" trading pattern could trigger short-term volatility.
