Bitcoin News Today: Fed Rate Cut Probability Falls to 92.1% Amid Surging PPI and Market Caution

The probability of a 25-basis-point Federal Reserve rate cut at the September 2025 meeting has slightly declined, according to the CME Group’s FedWatch tool. As of August 17, 2025, the likelihood of a cut stands at 92.1%, down from 94.3% earlier in the week and significantly lower than intraday readings that had briefly reached 99.9% [4]. This shift signals a narrowing of expectations as investors appear to be recalibrating based on recent economic data [1].

One of the key factors influencing this adjustment is the latest U.S. producer price index (PPI) data, which hit a three-year high and has dampened the market’s appetite for an aggressive easing cycle [2]. The CME FedWatch tool reflects this sentiment, showing that the probability of the Fed maintaining current interest rates has risen to 7.9% as of the same date [3]. While the expectation of a rate cut remains high, the decline in certainty points to a more cautious stance among market participants.

The reduced rate cut probability has had immediate repercussions on cryptocurrency markets. Major assets like Bitcoin and Ethereum have experienced price fluctuations, with on-chain fund flow data showing $2.0 million entering Base and $2.7 million exiting Ethereum [4]. Bitcoin’s price was recorded at $118,098.00 as of August 17, 2025, with a market cap of $2.35 trillion and a dominance level of 58.73% [4]. Although the 24-hour trading volume decreased by 27.69%, the 90-day increase of 14.77% suggests sustained long-term investor interest.

Analysts have noted historical parallels between reduced rate cut probabilities and increased stablecoin liquidity [4]. A similar pattern emerged during the 2023–2024 period, when shifting rate expectations led to heightened volatility in BTC and ETH prices. This trend prompted many investors to pivot toward stablecoins as a risk-mitigation strategy [4]. The Coincu research team has observed that a more measured Fed approach could drive similar behaviors in the current environment, with diversified asset allocations becoming increasingly attractive.

Global markets have also shown signs of adjustment. Asian equity indices have been volatile, with investors reacting to the potential for a smaller-than-expected rate cut. These movements highlight the broader implications of U.S. monetary policy on international liquidity and asset flows [5]. Despite the uncertainty, the 92.1% probability of a rate cut remains substantial, and expectations of lower borrowing costs continue to dominate market sentiment.

The absence of direct commentary from Federal Reserve officials or major crypto leaders on this development adds to the uncertainty. As of August 17, 2025, no verifiable statements from key players have been recorded that address the CME FedWatch data or related rate expectations [4]. This lack of guidance leaves the market to interpret the data on its own, increasing the potential for divergent reactions across asset classes.

As the Fed’s September meeting approaches, further economic data releases and central bank communication will be critical in shaping the final outcome. The 92.1% probability, while still high, reflects a dynamic and evolving market environment where expectations shift in response to new information [1].

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Source: [1] AOL.com (US stocks close mostly higher after EU trade deal) https://www.aol.com/us-stock-futures-higher-trump-100333651.html

[2] 富途牛牛 (US PPI hits three-year high and hits interest rate cut expectations) https://news.futunn.com/en/post/60675385/us-ppi-hits-a-three-year-high-impacting-interest-rate

[3] Moomoo (美联储在九月份降息25个基点的概率略微下降至92.1%) https://www.moomoo.com/hans/news/flash/20917566/the-probability-of-a-25-basis-points-interest-rate-cut

[4] MSN (Asia markets stumble as hot PPI print reins in Fed rate cut hype) https://www.msn.com/en-us/money/markets/asia-markets-stumble-as-hot-ppi-print-reins-in-fed-rate-cut-hype/ar-AA1Kyn4P?ocid=finance-verthp-feeds

[5] Offshore (Asia markets recover after hot U.S. price data) https://energynews.oedigital.com/energy-markets/2025/08/15/asia-markets-recover-after-hot-us-price-data