Bitcoin : Goldman Sachs changes its mind about Fed rates

The crypto market enters a new phase of uncertainty as Goldman Sachs revises its monetary scenario. The American bank now forecasts a Fed rate hike next week, following stronger-than-expected core inflation in August. This change comes as bitcoin trades below $80,000. Investors have adjusted their expectations, with the probability of a hike now approaching 90%. The September decision could impact market reactions.

Goldman Sachs abandons its status quo scenario

On July 31, Goldman Sachs defended the hypothesis of a Fed without change until the end of 2026. The bank then estimated that rates would remain stable, with monthly core inflation likely to slow. However, new data led its analysts to revise this forecast.

Now, the team led by David Mericle anticipates a 25 basis point hike at the September 16 meeting. The FOMC could raise its federal funds target range from 3.50% to 3.75%. JPMorgan, Citigroup, Mitsubishi UFJ, and TD Securities also share this outlook.

In this context, the bitcoin price trades below $80,000 while markets factor in a different monetary environment. The Wall Street Journal reports that investors almost consider a rate hike next week a given. Attention thus shifts to the path of rates after this possible decision.

August inflation changes expectations

The trigger comes from the core Consumer Price Index (CPI) for August. This indicator, which excludes food and energy, rose by 0.3% month-over-month, against 0.2% expected. This difference took on particular importance in expectations for September.

Before the release, analysts associated 0.2% with rate maintenance. Conversely, a 0.3% result was expected to strengthen the case for a hike. The data thus provided the expected signal to quickly shift positions. Bitcoin is therefore facing higher rate expectations.

The CME FedWatch tool initially assessed the probability of a 25 basis point hike at about 69%. After publication, this estimate rose to 86.5% during the session. Since then, overall market expectations are approaching 90%, showing the rapid effect of the inflation figure.

Several signals had prepared the ground

However, the September hike is not solely based on inflation. In August, Chase already pointed out that slower normalization of supply chains around the Strait of Hormuz could facilitate intervention. The institution also mentioned markets’ doubts about the Fed’s credibility in fighting inflation.

Goldman Sachs now joins several institutions considering a tighter decision. Bitcoin is no longer just questioning if the Fed can raise rates. It is also trying to determine what this decision will imply for the rest of monetary policy.

For bitcoin, this transition occurs while the price remains below $80,000. The context does not provide a clear signal to anticipate a reaction. Upcoming indications will mainly depend on the FOMC decision and expectations built around rates.

The bitcoin chart sends an unfinished signal

However, the market showed an intriguing technical sign the same day. On the daily chart, the 50-day EMA briefly crossed above the 200-day EMA. Traders call this crossover a “golden cross” and use it as a potential signal of a trend change. However, the signal did not hold until the close.

On the 4-hour chart, another “golden cross” has remained visible since late August. The trend also retains significant strength on the daily unit, with an ADX at 45. However, the expected technical confirmation did not come at the close. Bitcoin thus remains a focus in view of monetary expectations.

The upcoming FOMC meeting will therefore be the key date for markets. If the 25 basis point hike is confirmed, investors will watch for indications about the course of monetary policy. In the short term, bitcoin could continue evolving in line with monetary expectations and technical signals. Sustained crossing above $80,000 will then depend on how the market integrates this new scenario.