Bitcoin Gains as Fed’s Jefferson Signals Patience on Rate Hikes

Bitcoin gains — Bitcoin posted tentative gains on October 1 as Treasury yields fell and a key Federal Reserve official signaled a cautious approach to further interest rate increases.

Fed Vice Chair Philip Jefferson stated in prepared remarks that policymakers need “more time” before deciding on additional rate hikes, noting that rising yields across the term structure indicate investors are reassessing the macroeconomic landscape. This was interpreted as a dovish signal, tempering market expectations for aggressive tightening.

The commentary led to a shift in market-implied probabilities for the central bank’s next moves. The odds of a rate hike at the Fed’s October 28 meeting fell to 30% from 70% earlier in the week, according to data cited in the report. The likelihood of one or more hikes by year-end also declined to 80% from 95% a week prior.

The market movement occurred ahead of the closely watched U.S. non-farm payrolls jobs report scheduled for release on Friday, October 2. Lower interest rate expectations typically reduce the opportunity cost of holding non-yielding assets like Bitcoin, providing a supportive backdrop for crypto markets.