Bitcoin staged a modest recovery in the morning hours in the US on Friday after a 10% sell-off overnight, as the likelihood of a Federal Reserve rate cut in December rose sharply following dovish remarks from New York Fed President John Williams.
“I still see room for a further near-term adjustment to the target range for the federal-funds rate to move the policy stance closer to the neutral range,” Williams told the WSJ. “Looking ahead, it is imperative to restore inflation to our 2% long-term target on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment target.”
Williams’ comments stand in stark contrast to those of the leading Fed hawk, Cleveland Fed President Beth Hammack, who yesterday more or less shrugged off any concerns about the labor market, choosing instead to focus on inflation and what she believes is a booming stock market.
Williams’ comments had an immediate impact after hitting the band, sending the price of bitcoin from around $81,000 to back above $84,000. It was trading at $83,500 at press time, still down 9.5% over the past 24 hours. Nasdaq 100 futures also edged up 0.35% from about flat before the remarks.
The odds of a 25 basis point rate cut at the Fed’s December meeting rose to 70%, up from just 39% a day ago, according to the CME FedWatch Tool.
