Expectations of Federal Reserve rate cuts have faded

Fed Rate-Cut Hopes Evaporate as Hike Odds Hit 12.4%—Crypto Rally Reverses

The rate-cut party is over. CME FedWatch shows the probability of a Fed cut at the April 29 meeting has fallen to zero, while the odds of a hike have jumped to 12.4%. Markets are rapidly repricing—and crypto is feeling it.

Bitcoin surged from $64K to $76K in early March on rate-cut hype. Now that those expectations are gone, BTC has pulled back to $68,739. Analyst Ash Crypto points to the oil spike from the Iran war, which is pushing hike odds higher and handing momentum to sellers.

Brent crude is up 50% since late February, trading at $112. The Strait of Hormuz is nearly shut. Inflation expectations are at 5.2%—well above the Fed's 2% target. That makes rate hikes more likely and weakens the case for institutional money flowing into crypto.

Analyst DefiWimar notes swaps markets now price a >50% chance of a hike by year-end—suggesting crypto's bullish narrative may be understated. Trader MarketSync_ points out that futures still expect no move at the next meeting, meaning short-term swings could be more about sentiment than policy.

If oil stays high and the strait stays blocked, rate-hike odds could keep rising. Each increase chips away at institutional appetite for risk assets. Near-term pressure on crypto isn't going anywhere.