Strong jobs just triggered a hawkish UBS reversal that could pressure Bitcoin through December

A notable development has hit the crypto markets. UBS's new forecast of two Federal Reserve rate hikes this year extends Bitcoin's potential macro headwind through December. The issue reaches beyond September's decision: investors may have to weigh the cost of holding a non-yielding asset against interest-bearing alternatives through the end of 2026. 7 that UBS Global Wealth Management now expects increases of 25 basis points, or a quarter of a percentage point, in both September and December.

It had previously expected no policy change this year. UBS cited strong August labor data, hawkish Fed communication and inflation risks from supply bottlenecks. Markets are already moving toward that view.

Market Dynamics

Futures price in a roughly 58% chance of a quarter-point hike at the Sept. 15–16 meeting, up from 52% before the jobs report. For Bitcoin, the risk is that higher rate expectations keep Treasury yields supported, preserve the appeal of dollar assets and make investors less willing to take risk.

Strong jobs give inflation more weight The Bureau of Labor Statistics reported that employers added 162,000 jobs in August and unemployment held at 4. Hiring exceeded the average monthly gain of 31,000 over the preceding 12 months. But the strength was uneven.

Food services and drinking places added 59,000 jobs, while local government education added 42,000. Information employment fell by 23,000. Even so, labor-market resilience changes the Fed's policy tradeoff.

Market Impact

A deteriorating jobs market can increase pressure to ease. When hiring holds up, policymakers have more room to focus on inflation and maintain restrictive conditions. Governor Christopher Waller described that balance in Sept.

3 remarks, before the jobs release. He said continued progress on inflation could justify holding rates steady, while hot August inflation could make him consider a hike. The jobs report therefore strengthens the labor side of the argument for tighter policy, leaving inflation as the next major variable for September.

Related Reading Bitcoin dips below $80,000 as a hot August jobs report shifts Fed policy expectations UBS's forecast also extends the possible tightening horizon beyond the next meeting. Markets respond not only to the next Fed decision but to the expected path of rates across several meetings. The Fed's explanation of monetary transmission describes how policy expectations influence longer-term interest rates, asset prices and exchange rates.

This shift continues to shape the digital-asset landscape, with analysts examining its near-term effects.