Bitcoin Falls as Analyst Says the Fed 'Really Should' Raise Rates This Month

Crypto analyst Benjamin Cowen argued Friday that the Fed “really should” raise rates at its Sept. 16 decision after a blowout jobs report pushed rate hike odds back to 60%.What Cowen Said About the Jobs ReportCowen argued on YouTube that the August jobs print essentially reversed what Fed Governor Waller said Thursday, after Waller’s comments had briefly made a hold seem more likely.With only two weeks left before the Sept. 16 decision, Cowen noted that a 60/40 split is unusually uncertain, since market expectations typically settle at 80% to 90% certainty within one to two weeks of a Fed decision.His case for a hike rests on four factors hitting at once:GDP tracking at 4.7% for Q3 according to the Atlanta FedInflation still running at 3.3% to 3.4% year-over-yearLabor market showing resilience rather than weaknessOil near $90 a barrel adding fresh inflationary pressureIn that environment, Cowen said the Fed really should raise rates, and if it does not, the bond market will likely read it as a mistake and push long-end yields even higher.Why the Inflation Report Next Week Is the Real Swing FactorCowen argued that the September inflation report, due before the Fed meeting, is the single data point that will settle the debate.A hot print alongside the strong jobs data makes a rate hike almost unavoidable in his view. A cooler print gives the Fed cover to hold and potentially hike later in the year.He also flagged that the Bank of Japan is very likely to raise rates in September, with the Japanese 2-year yield already at 1.74% against a policy rate of 1%, pointing toward at least one more hike before year end.Where Bitcoin Stands After the SelloffAs Friday, Bitcoin dropped below $80,000 immediately after the jobs report, giving back most of Thursday’s 5% breakout gains.The Parabolic SAR flipped bearish at $77,800, with $76,000 as the channel base that must hold to keep the broader uptrend intact.Image: Shutterstock