All eyes are on the U.S. Federal Reserve ahead of tomorrow’s pivotal interest rate decision. With the Federal Open Market Committee FOMC set to meet on July 30, speculation is swirling across markets: Will the Fed cut, hike—or hold?
📊 Likely Outcome: Another Hold at 4.25%-4.50%
My forecast? No change. That would mark the fifth consecutive hold, keeping rates at 4.25%-4.50%. And here’s why:
✅ Key Drivers Behind the Hold
Inflation remains stubborn at 2.7%, still above the Fed’s long-term 2% target.
Labor market shows ongoing resilience—job growth is steady, unemployment remains low.
Tariff pressures on global trade may be artificially inflating prices, limiting the Fed’s flexibility.
So while markets crave a dovish pivot, the Fed is still watching for more concrete progress on inflation.
🗣️ Powell’s Message: “Data Over Politics”
Fed Chair Jerome Powell has been clear: Monetary policy decisions are driven by data, not political narratives. With the U.S. election cycle heating up, expect Powell to distance the Fed from political speculation.
📉 September Cut Still on the Table?
Despite tomorrow’s expected pause, traders are pricing in a possible rate cut in September, especially if:
Inflation dips below 2.5%
Consumer spending slows
Global economic data softens
Futures markets reflect a 56% chance of a cut by September, per CME FedWatch.
💬 Market Takeaway
For crypto and risk assets, a continued hold removes immediate headwinds but doesn’t yet unleash bullish momentum. A confirmed pivot in September could act as a major tailwind for Bitcoin, Ethereum, and altcoins.
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What do you think—Is the Fed playing it smart, or staying too cautious?
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