CLARITY Act vote meets Fed rate hike: Five things to know in Bitcoin this week
Bitcoin traders brace for volatility as the CLARITY Act awaits a Senate vote to move forward and the Fed is due to announce its latest rate decision.
Bitcoin traders anticipate volatility as the CLARITY Act faces a Senate vote and the Fed prepares to announce its latest rate decision. Bitcoin (BTC) dipped below key weekly support levels at the start of September 3rd, as traders monitor volatility indicators. The Federal Reserve's decision on interest rates on Wednesday will significantly impact risk-asset traders.
Inflation concerns and cautious remarks from Fed Chair Kevin Warsh led to a 25 basis point hike to 3.75-4% from the previous rate, despite dissenting opinions favoring a hold. This mirrors the Fed's July decision, where Warsh held rates while some officials advocated for an increase. Now, Warsh faces pressure from US President Donald Trump to either avoid a hike or implement rate cuts.
The CME Group's FedWatch Tool now shows only a 13.3% chance of rates staying unchanged, down from 40% a week prior. While inflation data and oil price gains from the Middle East have slightly reduced the probability of a rate pause, the Fed's target rate probability comparison for the September FOMC meeting remains cautious. Meanwhile, US consumer inflation expectations reached 4.6% over the next year, up 1.1% from the start of 2026, with gas prices and trade tariffs contributing to the upward trend.
The CLARITY Act, a bipartisan proposal, awaits a crucial procedural vote on Tuesday, with a 60-vote requirement for passage. If approved, the bill can move to the Senate floor for debate.
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