Cleveland Fed President Advocates Small Rate Hikes, Impacting Bitcoin

Cleveland Fed President Beth Hammack supports restrictive monetary policy to achieve a 2% inflation target, advocating for smaller, quicker rate adjustments. Current rate futures indicate a potential hike in December, with the US dollar near an 18-month high. Bitcoin (BTC) has declined in October, typically a strong month for the cryptocurrency. Hammack, a voting member of the Federal Open Market Committee, highlighted that inflation pressures will prolong the return to the target rate. The personal consumption expenditures (PCE) price index rose 3.4% annually, with core PCE at 3%. Inflation has exceeded the target for over five years, raising concerns about entrenched inflationary mindsets. The Fed raised rates in September for the first time in three years, with expectations for another hike in December, where traders see an 84.7% chance of a move. The US Dollar Index (DXY) has reached an 18-month high, making dollar assets more appealing and potentially diverting funds from riskier markets like crypto. Bitcoin is currently trading at 81661, down 2.56% in the last 24 hours, and approximately 35% below its all-time high of 126080 set on October 6, 2025. October has seen BTC decline by 1.89% so far, despite being historically strong. The upcoming Consumer Price Index data on Wednesday will provide insights ahead of the Fed's meeting on October 28.

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