Interest rate swap markets now fully price in a Federal Reserve rate hike of at least 25 basis points by end-2026, flipping the narrative that had previously supported Bitcoin as a beneficiary of anticipated Fed easing. Bloomberg reported the shift on May 22, the same day Fed Governor Christopher Waller called on the central bank to drop its easing bias. The pivot reflects growing bond market anxiety over fiscal pressures and persistent inflation, repositioning fixed-income volatility as a macro risk rather than a tailwind for risk assets. For Bitcoin, which had rallied partly on expectations of looser monetary policy, the repricing raises questions about near-term momentum as traders reassess the macro backdrop underpinning the broader crypto rally.
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