UBS Sees Two Fed Hikes; Bitcoin Faces Pressure to December

UBS Global Wealth Management now expects two 25‑basis‑point Federal Reserve rate increases, at the Sept. 15–16 and Dec. 8–9 meetings. The firm revised its outlook after August labor data showed stronger hiring than expected.

The U.S. Bureau of Labor Statistics reported employers added 162,000 jobs in August and the unemployment rate held at 4.1%. Job gains were concentrated in food services and drinking places (+59,000) and local government education (+42,000), while information employment declined by about 23,000.

UBS cited the robust August labor report, hawkish Federal Reserve communication and inflation risks tied to supply bottlenecks when updating its forecast. The firm had earlier expected no policy change this year.

Futures markets shifted after the jobs report. Traders priced roughly a 58% chance of a 25‑basis‑point increase at the Sept. 15–16 meeting, up from about 52% before the employment data.

Higher expected U.S. interest rates can support Treasury yields and raise the return on dollar‑denominated interest‑bearing assets. That increases the opportunity cost of holding non‑yielding assets such as Bitcoin. Higher borrowing costs can make leveraged positions more expensive to run and can reduce demand for new risk investments.

A 2023 International Monetary Fund working paper found that Fed tightening was associated with reductions in a common cryptocurrency price factor through weaker risk‑taking. The paper provides historical evidence of a link between monetary policy and crypto prices, though the magnitude and timing of any effect in 2026 are uncertain.

Bitcoin traded near $79,375 on Sept. 7. Its near‑term path will depend on whether upcoming data lift rate expectations further and whether crypto‑specific demand offsets macroeconomic headwinds.

The next major data release is the August consumer price index on Sept. 11, ahead of the Federal Open Market Committee meeting on Sept. 15–16. The Federal Reserve’s public communication is limited by an official blackout period from Sept. 5 through Sept. 17, making the CPI print an important signal before policymakers meet.

In remarks before the jobs release, Federal Reserve Governor Christopher Waller noted that “continued progress on inflation could justify holding rates steady, while hot August inflation could make him consider a hike.” Employment and inflation trends between now and December will affect the outlook for policy and market conditions.