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– This reassessment was reflected in several market indicators. Kalshi traders put the probability of a quarter-point rate hike at 48% , while Polymarket participants indicated a 49% chance that the Fed would raise rates. According to CME FedWatch, traders in federal funds rate futures put the probability of a quarter-point increase at nearly 56% .

According to CNBC, prior to Warshs remarks, the probability that the Fed would leave rates unchanged in September stood at nearly 70% . The article also noted that investors had previously focused more on the possibility of a rate hike following the Feds July meeting, when three members of the Federal Open Market Committee dissented from the decision to keep rates unchanged and stated that rates needed to be raised in response to high inflation.

The probability of a rate hike then declined after a weaker-than-expected July jobs report showed a decline in U.S. jobs and a slowdown in inflation, which nevertheless remained above the Feds 2% target. In his speech at Jackson Hole, Varsh said that the better-than-expected summer inflation figures did not indicate a significant improvement in underlying trends. He noted that the central bank needs confidence that core inflation is moving toward the target clearly and quickly enough.

The available data points to the need to revise expectations regarding the Feds policy in September, rather than to any definitive conclusion about the implications for the cryptocurrency market. Bitcoin may remain relevant for traders monitoring overall sentiment in the risk market; however, the data cited does not indicate that changes in the probability of Fed action have already had specific consequences for the Bitcoin market.

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Yields on short-term bonds did indeed react to the speech. According to CNBC, the yield on 2-year Treasury bondswhich is closely linked to the Feds decisions on short-term ratesreached its highest level since late July. This reaction indicates that interest rate markets responded to the likelihood of a rate hike in September.

The inflation outlook remains a key element of the discussion. In a speech on August 5, Federal Reserve Board member Lisa D. Cook stated that the Personal Consumption Expenditures price index rose 3.7% in the 12 months through June, while the core price index rose 3.3% .

Cook described the inflation rate as excessively high and said she was prepared to support a rate hike if necessary, while noting that deflationary factors could bring inflation back to the Feds target even without a rate hike.

Cook also reported that the unemployment rate in June stood at 4.2% and described the labor market as stable amid low levels of hiring and layoffs. Her assessment illustrates why incoming inflation and employment data remain important for policy discussions ahead of the meeting.

The probability of a rate hike at the September 2026 FOMC meeting exceeding 50% is precisely why traders seeking asymmetric upside potential are shifting their focus to early-stage projects with real potential for significant growth.

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