Bitcoin faced sharp selling pressure this week as a resilient US labor market and a decidedly hawkish Federal Reserve crushed hopes for near-term interest rate cuts. The cryptocurrency slid below $64,000 on June 19, down nearly 3% on the day, after touching an intraday high of $66,315 the previous afternoon. Later in the week, BTC hovered near $62,000, having fallen from above $67,000 earlier. The drop came even as US equities shrugged off the same macro headwinds, with the S&P 500 forecast by Standard Chartered to reach 7,950 by mid-2027.
The catalyst was a confluence of strong jobs data and a more aggressive Fed outlook. Initial jobless claims fell by 4,000 to 226,000 for the week ending June 13, staying near historic lows and signaling that employers are holding onto workers. At the same time, the Federal Open Market Committee (FOMC) held its benchmark rate at 3.50%–3.75% during Chair Kevin Warsh’s first meeting on June 17. The central bank’s new dot plot shocked markets: the median projection for end-2026 rose to 3.8% from 3.4%, implying rate hikes rather than cuts. Nine of 18 participants now expect at least one increase this year, with six expecting two hikes. The Fed also lifted its year-end PCE inflation forecast to 3.6% from 2.7%, and May CPI came in at a blistering 4.2%, the hottest since 2023.
These developments pushed expectations for any 2026 rate cut to near zero. Futures markets now price an 85% probability of a December hike, and the 2-year Treasury yield jumped more than 16 basis points to 4.22%. The US dollar index hit its highest level in over a year. For Bitcoin, which has behaved as a liquidity-sensitive instrument throughout the year, this environment is poison. Higher real yields, a stronger dollar, and reduced appetite for speculative assets combined to force the digital currency lower. Spot Bitcoin ETFs saw an $82.2 million net outflow on Wednesday, further underscoring the bearish mood.
Equities, however, are displaying surprising resilience. Standard Chartered’s second-half 2026 outlook remains overweight global equities, especially US and Asia ex-Japan, betting that strong corporate earnings and AI-driven capital expenditure will offset tight monetary policy. The bank expects the US economy to grow 2.1% this year, supported by AI investment, a recovering labor market, and increased manufacturing. Goldman Sachs and Citigroup have both pushed their rate-cut forecasts into 2027 or late 2026, but strategists argue that earnings growth can support stocks even in a higher-rate environment.
The divergence is stark: while the S&P 500 pushes toward record highs, Bitcoin and gold (down 1.8% to around $4,173 per ounce) are struggling. The message from the markets is that the era of cheap liquidity is still on hold, and crypto, as a risk asset without yield, bears the brunt of that reality. With Chair Warsh removing forward guidance, every upcoming CPI, payrolls, and claims release will be a live policy input, leaving Bitcoin traders at the mercy of the data-dependent Fed.
