Crypto market loses 2% of its value on September 15. Consequently, Bitcoin fell below $76,000.
Meanwhile, traders prepared for two major US events. Specifically, these are a likely Fed rate hike and a Senate vote on the CLARITY Act.
Why the crypto market loses 2% today
Data showed widespread losses. The total value of digital assets fell to around $2.58 trillion. Meanwhile, investors reduced risk before the two events.
Bitcoin dropped more than 3%. It moved below $76,000 after failing to hold gains. In addition, losses spread across major altcoins. Furthermore, US-listed crypto companies came under pressure.
The decline accelerated as traders assessed the FOMC meeting. That meeting runs September 15–16. Futures tied to the federal funds rate placed hike odds above 92%. Therefore, a hike is now the main expectation.
An increase of that size would lift the target range. Specifically, it would move from 3.50%–3.75% to 3.75%–4.00%. The decision comes September 16. Fed Chair Kevin Warsh will then comment. His remarks could indicate whether officials view this as a single response.
Fed hike odds rise as inflation concerns return
Expectations for tighter policy have grown. This follows renewed concern about US inflation. Goldman Sachs and JPMorgan forecast a 25-basis-point increase. Morgan Stanley also expects a September hike. It expects another in December.
The bank linked its forecast to persistent inflation. Higher oil prices and AI investment demand also contribute.
Rising borrowing costs tend to weaken demand for non-yielding assets. Investors can earn higher returns from Treasuries after a hike. Therefore, this raises the hurdle for holding volatile assets.
Higher policy rates can also increase leverage costs. Crypto traders may reduce exposure when financing becomes expensive. Meanwhile, a firmer dollar can pressure dollar-priced assets.
The market’s response will depend on guidance. A quarter-point increase is already expected. Nevertheless, any signal of further hikes could force reassessment.
Trump says he will respect the Fed decision
National Economic Council Director Kevin Hassett commented. He said President Trump would support Warsh’s right to decide independently. However, the White House does not favor another rate increase.
“President Trump 100% respects the independence of Kevin Warsh,” Hassett said. He added that the administration would support Warsh regardless.
Trump and Hassett have both opposed raising borrowing costs. During a Fox News interview, Hassett said he would be cautious. He noted that an independent central bank should avoid the political cycle.
The distinction matters for US investors. The Fed sets monetary policy without White House instructions. Political comments can affect expectations. Nevertheless, the FOMC votes based on inflation, employment, and financial conditions.
Recent inflation readings have kept pressure on policymakers. Wall Street firms have warned about the PCE index. It could come in hotter than expected. Persistent price growth would give officials more reason to keep rates elevated.
CLARITY Act faces major setback as Senate fails cloture
The CLARITY Act has stalled in the Senate. A motion to invoke cloture failed to reach 60 votes. Consequently, this represents a major setback for the crypto bill.
Senators voted 50 to 49 against invoking cloture. Notably, key Democrats voted no. These include Angela Alsobrooks, Ruben Gallego, and Kirsten Gillibrand. They had led negotiations.
Meanwhile, Republicans Susan Collins, Josh Hawley, and Jerry Moran also voted no. Senator Thom Tillis voted no and moved to recommit.
It remains unclear what happens next. Majority Leader John Thune can file another cloture motion. However, without a bipartisan deal, the bill is unlikely to advance.
Odds of passage fall sharply
The odds of the CLARITY Act becoming law this Year fell sharply. Polymarket data shows only a 7% chance. This is down from as high as 31% yesterday.
The ethics provision has remained the major obstacle. Despite Trump’s latest concessions, Democrats argued the provision was insufficient. In their counterproposal, Democrats proposed covering dependent children of federal officials.
Senator Gallego commented after the failed vote. He said the president wants “time to crime.” He also said he won’t support legislation that enables it. He claimed Republican leadership ended talks and forced a vote. “They were never serious about bipartisan negotiations,” he asserted.
