FED RATE EXPECTATIONS VS. BITCOIN
Does Bitcoin respond when the market starts to expect rate cuts?
The spread between the 2-year Treasury and the effective federal funds rate, used as a proxy for monetary policy expectations.
Fed rate expectations (2-year minus Fed Funds proxy)
0.56 pp
Source: Calculado pelo Trade With Renato
Bitcoin (USD)
US$ 80,241
Source: Coinbase Exchange
Loading the chart…
CorrelationA statistical measure of how much two series move together, ranging from -1 to +1.Why it matters: It allows relationships that look real to the naked eye to be compared objectively.How to read it: Close to +1: strong co-movement. Close to 0: little linear relationship. Close to -1: strong inverse movement.Common mistake: Calculating correlation on price levels instead of returns. Two series that only rise over the long run will produce a high correlation even with no real relationship — the classic spurious correlation.
-0.23
Historically associated: weak co-movement, in opposite directions, over the observed window.
- Method
- Pearson
- Basis
- Returns
- Rolling window
- 90 days
- Effective frequency
- business days
- Sample size
- 64 observations
- Historical mean
- 0.05
- Séries com frequências diferentes; a comparação foi feita na frequência mais baixa (dias úteis).
Near +1: strong co-movement. Near 0: little linear relationship. Near −1: strong inverse co-movement. In every case, correlation describes co-movement and does not establish cause and effect.
Lead-lagA technique of shifting one series in time to test whether it tends to move before the other.Why it matters: It helps distinguish which variable leads and which one reacts.How to read it: Look at the shape of the correlation-by-lag curve, not just the peak. An isolated peak surrounded by low values is usually noise.Common mistake: Testing dozens of lags and reporting only the best one. The more combinations you test, the higher the chance of finding one that looks good by pure chance.
Correlation recomputed with the first series shifted in time. Read the shape of the whole curve: an isolated peak surrounded by low values is almost always noise.
WHAT THE DATA SHOWS NOW
Sentences generated by deterministic rules over the numbers computed on this page. None of them is written by a language model. Open any item to see the formula and the values used.
The 90-day correlation between Fed expectations and BTC stands at -0.23, a weak association in opposite directions, measured on returns at business-daily frequency with 64 observations. Correlation measures co-movement and does not establish that one series determines the other.
- Series:
- fed-expectation-spread, btc-usd
- Period:
- 08/29/2023 to 08/26/2026
- Formula:
- correlação de pearson sobre returns, janela de 90 dias
- Values:
- coeficiente=-0.2288 · amostra=64.0000 · metodo=pearson
The current correlation (-0.23) is below the historical average of the rolling correlation series itself (0.05). The relationship weakened relative to the historical pattern over the available period.
- Series:
- fed-expectation-spread, btc-usd
- Period:
- 08/29/2023 to 08/26/2026
- Formula:
- correlação atual − média da correlação móvel de todo o período
- Values:
- atual=-0.2288 · media_historica=0.0501 · diferenca=-0.2789
Fed rate expectations (2-year minus Fed Funds proxy) stands at 0.56 pp on 08/26/2026, a change of +0.19 pp from 05/28/2026.
- Series:
- fed-expectation-spread
- Period:
- 08/29/2023 to 08/26/2026
- Formula:
- valor atual − valor de ~90 dias atrás
- Values:
- atual=0.5600 · data_atual=2026-08-26 · anterior=0.3700 · data_anterior=2026-05-28
Bitcoin (USD) stands at 80,241.3000 US$ on 08/28/2026, a change of +8.77% from 05/30/2026.
- Series:
- btc-usd
- Period:
- 08/29/2023 to 08/28/2026
- Formula:
- (valor atual ÷ valor de ~90 dias atrás) − 1
- Values:
- atual=80241.3000 · data_atual=2026-08-28 · anterior=73770.6900 · data_anterior=2026-05-30
The current value of Fed rate expectations (2-year minus Fed Funds proxy) sits at percentile 97 of the distribution observed over the loaded period — near the top of the available historical range.
- Series:
- fed-expectation-spread
- Period:
- 08/29/2023 to 08/26/2026
- Formula:
- proporção de observações históricas menores ou iguais ao valor atual
- Values:
- valor_atual=0.5600 · percentil=96.9251 · observacoes=748.0000
What this chart measures
How much the market expects rates to change. A negative value indicates expectations of cuts; a positive value, expectations of hikes.
Why this relationship matters
Risk assets have typically responded to shifts in expectations before the Fed acts. When the market begins pricing cuts, the repricing happens months ahead of the first actual reduction.
How to read it
The change of sign — from positive to negative — is the event to watch, not the absolute value.
When this relationship tends to hold
During rapid repricings of monetary policy, typically around inflation and employment data.
When it can break down
This is a PROXY. The correct measure would come from the implied probabilities in CME fed funds futures, which are licensed data. The proxy captures direction, but not the magnitude of the probability of a cut.
Limitations
A proxy built from two instruments of different maturities embeds a term premium, not expectations alone. It should not be read as a probability of a cut.
SOURCE AND METHODOLOGY
Expectation ≈ 2-year Treasury yield (DGS2) − effective federal funds rate (DFF), in percentage points, daily. It stands in for the implied probabilities in CME interest rate futures, which require a commercial license that has not yet been contracted.
- Fed rate expectations (2-year minus Fed Funds proxy)
- Calculado pelo Trade With Renato · percentage points · business days
Licence: Derivado de fontes de domínio público
Formula: Expectativa ≈ rendimento_2anos − Fed_Funds_efetiva
View at the original source - Bitcoin (USD)
- Coinbase Exchange · USD · daily
Licence: Dados públicos de mercado da Coinbase Exchange
View at the original source
CorrelationA statistical measure of how much two series move together, ranging from -1 to +1.Why it matters: It allows relationships that look real to the naked eye to be compared objectively.How to read it: Close to +1: strong co-movement. Close to 0: little linear relationship. Close to -1: strong inverse movement.Common mistake: Calculating correlation on price levels instead of returns. Two series that only rise over the long run will produce a high correlation even with no real relationship — the classic spurious correlation. measures co-movement and does not establish CausalityA relationship in which one variable actually brings about the change in another.Why it matters: It is what most people actually want to know, and it is what correlation does NOT answer.How to read it: Establishing causality requires theory, experiment, or statistical identification — it is not enough to observe two lines rising together.Common mistake: Concluding that A causes B because the correlation is high. Often a third factor moves both, or the relationship is a coincidence of the chosen period.. The relationship shown depends on the macroeconomic regime and may weaken or disappear.