Rate cuts priced out, hike now the base case

"The bond market crisis is intensifying," trading desk The Kobeissi Letter wrote in a post on X, noting that "After weeks of euphoria, the market is beginning to react today" and that the current yield trajectory is "unsustainable."

The repricing has been dramatic. CME Group's FedWatch tool now shows traders assigning a 60%+ probability that the Fed's next move is a 25 basis-point hike rather than a cut, with the most likely timing for that hike now sitting at March 2027. Just weeks ago, the consensus had been for two cuts by mid-2026.

"We expect to see 7%+ mortgages next, all as auto loan delinquencies have reached 32-year highs," Kobeissi added. "Inflation is back and higher rates are coming."

Crypto caught in the macro crossfire

The move underscores how tightly Bitcoin remains tethered to traditional rates markets despite the structural tailwinds — spot ETF flows, the recent Senate Banking Committee advance of the CLARITY Act, and a record corporate treasury bid — that have dominated the bull narrative. As BNC has previously noted, rising 10-year yields have historically pressured BTC by shifting global liquidity expectations and squeezing the carry trades that backstop risk asset positioning.

The next macro test comes with next week's FOMC commentary, where any acknowledgement from Powell that hikes are back in play would likely accelerate the move toward the mid-$70,000s. A re-anchoring of cut expectations, on the other hand, could see BTC reclaim $82,000 quickly.
source: https://www.tradingview.com/news/bravenewcoin:54f9da185094b:0/