What Will Kevin Warsh Decide at the September Fed Meeting? Two days from now, the Federal Reserve will hand down a decision that could set the tone for crypto, stocks, and the dollar for mont
What Will Kevin Warsh Decide at the September Fed Meeting?
Two days from now, the Federal Reserve will hand down a decision that could set the tone for crypto, stocks, and the dollar for months to come. The Fed meeting on September 16 has turned into the most-watched event of the week. Kevin Warsh, the Fed chair, is set to announce the outcome alongside the rest of the committee.
Whatever gets decided at this Fed meeting will not just move interest rates, it will move sentiment, and sentiment moves price.
Key takeaways:
FedWatch data puts the odds of a 25 basis point rate hike at 86.6%, against just 13.4% for no change.
President Trump has threatened to stop trade with countries running a trade surplus with the US if the Fed does not cut rates, a threat that clashes directly with what traders expect Warsh to do.
CoinGecko data shows total crypto value holding at $2.7 trillion, with Bitcoin still controlling 57.7% of that figure.
The Fed's benchmark rate has sat at 3.50% to 3.75% for months. The last time the Fed actually raised rates before now was July 26, 2023, lifting the range by 25 basis points to 5.25%-5.50%, before a long stretch of cuts and holds followed. Now, at this week's Fed meeting, the story has flipped.
Trump wants a cut. Kevin Warsh and much of the committee lean toward a hike. That gap is the single biggest talking point heading into Wednesday.
Nine days ago, Trump said he'd stop trading with every country running a trade deficit with the US if the Fed refuses to cut rates. That's not a small threat. It touches roughly half of all US trading partners, including Mexico, China, Taiwan, Germany, Japan, South Korea, Canada, and India.
If the Fed hikes as expected and Trump follows through, global trade could shift in a way not seen in years, one of the biggest pieces of Trump latest news this month.
As per the FedWatch tool, the probability of a 25 basis point hike sits at 86.6%, while the chance of no change is only 13.4%.
Goldman Sachs has pulled its earlier call for unchanged rates and now expects a hike instead. Goldman noted the latest CPI print didn't really shift its inflation view, but with almost 90% already pricing in a hike, the Fed may prefer to deliver one rather than surprise everyone.
Additionally, James Thorne, Chief Market Strategist at Wellington-Altus, believes this hike is less about inflation and more about meeting Wall Street's expectations. Diane Swonk, Chief Economist at KPMG, sees it differently. She views services inflation as still running too hot and expects three hikes in total by early 2027.
Their disagreement shows just how split opinion is on Fed interest rates going into this meeting.
According to The Kobeissi Letter, US consumers now expect inflation to hit roughly 4.6% over the next year, the third-highest reading in 12 months and 1.1 points above the start of 2026. Around 30% now bring up gasoline unprompted, the fourth-highest share in two years, and about 37% mention tariffs, the highest since April.
Peter Schiff has pointed out that Trump won in 2024 partly by blaming inflation on Biden, but after two more years of rising prices tied to his own policies, voters may not extend the same excuse twice.
Crypto Rover laid out a five-day stretch that could turn into one of the roughest weeks of the year:
Sept 14: US trading resumes after major AI firms warned that AI-driven growth may need to cool off.
Sept 15: The CLARITY Act vote takes place; some lawmakers and banks already doubt it passes.
Sept 16: The Fed meeting lands, with hike odds near 90%. Since 2007-08, odds this strong have usually played out.
Sept 17: US housing data arrives as mortgage rates keep climbing, raising recession worries.
Sept 18: Japan releases CPI data and the Bank of Japan decides on rates.
If sentiment turns negative anywhere in that chain after this week’s event, CTAs could unload $140-150 billion in US stocks, and September already ranks among the weakest months historically.
A rate hike tends to pull money toward bonds and cash and away from riskier bets like Bitcoin and altcoins, since holding crypto no longer competes as easily against a safer return elsewhere. That is the short answer to how crypto market react on days like this: higher rates raise the cost of holding risk, and leveraged positions get pushed to unwind fast.
If the Fed hikes on September 16 as expected, expect quick, sharp moves in both directions rather than one smooth trend, since much of the hike is already priced in ahead of time.
YMYL Disclaimer:This content covers monetary policy and cryptocurrency, topics that can affect personal financial decisions. It's for informational purposes only and isn't financial, investment, or trading advice. Rate outcomes, inflation figures, and crypto prices are uncertain and can change without notice. Readers should do their own research and speak with a licensed financial advisor before making any financial decision.
