BTC Targets $74K Level While December Rate Hike Probability Soars to 96% Following Waller Comments
Following Federal Reserve governor Christopher Waller's announcement of his intention to support a 0.25% interest rate increase at the upcoming December FOMC meeting, Bitcoin's price movement and stock market futures experienced downward pressure.
The world's leading cryptocurrency Bitcoin (BTC) experienced a decline approaching the $74,000 threshold, while futures for US equities also saw losses on Tuesday following a prominent Federal Reserve official's expression of support for increasing interest rates.
Key points:
- On Tuesday, Bitcoin experienced a 1.3% decline in trading activity, touching $74,080 while Nasdaq futures decreased by 0.4% in advance of Wall Street's opening bell.
- The October Consumer Price Index data from the United States, scheduled for publication at 8.30am Tuesday, is anticipated to demonstrate a 0.3% monthly rise, representing a smaller increase compared to September's 0.6% advance.
- Christopher Waller, a governor at the Federal Reserve, stated his intention to "support" a 25-basis-point increase in interest rates during the FOMC meeting scheduled for Dec. 9, irrespective of the CPI figures released on Tuesday.
Waller maintains position on December rate increase despite anticipated lower CPI figures
According to information from TradingView, the BTC/USD pair touched $74,080 on the Bitstamp exchange, representing a daily decrease of 1.3%.
Futures for US equity markets trended downward following Federal Reserve governor Christopher Waller's announcement that he would back a 25-basis-point interest rate increase at the upcoming Federal Open Market Committee (FOMC) gathering on Dec. 9. As of this writing, futures for the Nasdaq 100 had declined by 0.4%.
Waller additionally stated that his position would remain unchanged regardless of inflation data coming in below expectations. The US Consumer Price Index (CPI) figures for October are set to be published at 8.30 am Eastern time on Tuesday. Market expectations point to a 0.3% month-on-month increase compared to September's 0.6% rise, which had been elevated due to increasing fuel prices.
"While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC's policy rate at our December meeting," Waller commented in a speech at the Bank of England Watchers Conference in London.
"However, if inflation comes in substantially higher than I expect, more robust action by the FOMC may be called for."
Although CPI demonstrates particular sensitivity to fluctuations in fuel prices, Waller additionally highlighted elevated readings from the Personal Consumption Expenditures (PCE) index, recognized as the Federal Reserve's "preferred" measure of inflation and which he verified was the "measure targeted by the FOMC."
"Let's just say it. September's inflation data were bad. There was no silver lining," he said, referring to PCE rising 0.5% month-on-month and 3.7% year-on-year, respectively.
In the immediate aftermath of the speech, market participants adjusted their expectations for a 25-basis-point rate increase in December from 76.3% to 96.3%, according to information from CME Group's FedWatch Tool.
Government shutdown in 2025 constrains availability of CPI market signals
Tightening measures in financial policy have historically served as opposing forces for cryptocurrency and risk asset valuations, as they suggest a contraction in liquidity and corresponding capital inflows.
Speaking about the factors driving the anticipated deceleration in CPI growth for October, Christopher Hodge, chief US economist at Natixis CIB Americas, identified price reductions in both fuel and shelter categories.
"We think the slowdown in core CPI will stem from a reversion of shelter prices, primarily owners' equivalent rents and lodging away from home. Similarly, the stabilization in diesel prices should help to quell price pressures in energy-intensive goods," he wrote, quoted by CNBC.
The Bureau of Labor Statistics (BLS), which publishes CPI, confirmed that Tuesday's release would include only month-on-month statistics due to the 2025 US government shutdown reducing data availability. CPI data for October 2025 was not issued for the same reason.