Bitcoin Price Eyes Crash Ahead of FOMC Minutes

The manager turned first to an overview of broad market developments during the intermeeting period. Respondents to the Open Market Desk Survey of Market Expectations (Desk survey) continued to see the economy as resilient and again marked up their forecasts for real gross domestic product (GDP) growth in 2026, while their expectations for headline personal consumption expenditures (PCE) inflation and the unemployment rate were little changed. Market- and survey-based policy rate expectations were likewise little changed. Market-based measures of policy rate expectations indicated one to two 25 basis point rate cuts this year, and the median modal path of the federal funds rate, as given in the Desk survey, continued to indicate expectations of two 25 basis point rate cuts this year. The manager turned next to Treasury market developments and market-based measures of inflation compensation. Shorter-term Treasury yields were little changed, while longer-term yields rose a few basis points on net; the Treasury curve steepened slightly as a result. Near-term inflation compensation continued to decline amid lower-than-expected consumer price index (CPI) readings, lower energy prices, and lower-than-anticipated pass-through of tariffs to customers; forward rates suggested that near-term inflation would stabilize close to current levels for the rest of the year. Model-based measures of short-term inflation expectations also declined some over the intermeeting period, with forward rates suggesting further modest declines over the course of this year. The Treasury market continued to function well amid low volatility. In light of the growing portion of Treasury securities that is financed using repos, the manager noted the importance of the stability of the repo market for the continued smooth functioning of the Treasury market. The recent announcement that Fannie Mae and Freddie Mac may increase their mortgage investment portfolios garnered substantial market attention and was followed by a notable decline in mortgage-backed securities yields relative to those on comparable-maturity Treasury yields. Still, the manager observed that the decline was unlikely to result in a material increase in mortgage refinancing because current mortgage rates are well above the weighted average rate of outstanding mortgages. The manager moved to a discussion o *FED: SEVERAL WOULD'VE SUPPORTED TWO-SIDED LANGUAGE ON RATE PATH *FED: SEVERAL SAW MORE CUTS IF INFLATION DECLINES AS EXPECTED *FED: MOST CAUTIONED DISINFLATION COULD BE SLOWER THAN EXPECTED Fed Minutes: Most participants cautioned that progress toward 2% target might be slower and more uneven than generally expected and judged risk of inflation running persistently above target was meaningful. Fed commenting on yen "rate check" on behalf of the BOJ "In the days leading up to the meeting, the dollar had depreciated markedly after reports that the Desk had made requests for indicative quotes, known as "rate checks," on the dollar–yen exchange rate. The manager noted…

Bitcoin remains stuck in the $67,000 range, with no clear direction or catalysts, down 46% from its October 6 all-time high. Opinions differ as to whether the asset has already bottomed out or is still on its way down. For instance, Nic Puckrin, cofounder of Coin Bureau, posted that “bitcoin is in the ‘Hope & Fear’ stage — which means it’s still not a low.” ...

Bitcoin’s Wall Street embrace was supposed to bring stability. Instead, it created a new vulnerability: dependence on American money that is now in retreat. Since Oct. 10, roughly $8.5 billion has flowed out of US-listed spot Bitcoin exchange-traded funds. Futures exposure on the Chicago Mercantile Exchange has fallen by about two-thirds from its late-2024 ...