Market participants now assess a 70% probability of a rate cut at the upcoming Federal Reserve meeting, a sharp rise from 39% a day earlier, aiding a recovery in bitcoin after an overnight decline. Bitcoin BTC $83,548.60 began a modest rebound in U.S. trading hours on Friday following dovish remarks from New York Fed President John Williams about the possibility of further monetary policy adjustment.
“I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral,” Williams told the WSJ. “Looking ahead, it is imperative to restore inflation to our 2% longer-run goal on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment goal.”
Williams’ comments contrasted with those of Cleveland Fed President Beth Hammack, who focused on inflation and a bubbly stock market rather than labor market concerns. Following Williams’ remarks, bitcoin rose from around the $81,000 level to exceed $84,000, though it was around $83,500 at press time, down about 9.5% over the past 24 hours. Nasdaq 100 futures also edged higher, about 0.35% versus a near-flat stance before his remarks.
Key takeaways from the day include: Williams signaling potential for another rate adjustment in the near term, which supported a shift in market expectations toward a December rate cut, while some officials remained hawkish about keeping policy unchanged amid inflation concerns. The response in risk assets suggests traders view Williams’ views as reinforcing the case for policy accommodation if labor market weakness persists and inflation trends toward target on a sustained basis.