Santiment data shows crypto social volume tied to rate-hike fears is spiking ahead of Wednesday's Federal Open Market Committee (FOMC) decision, repeating a pattern seen in June. On June 16,
Santiment data shows crypto social volume tied to rate-hike fears is spiking ahead of Wednesday's Federal Open Market Committee (FOMC) decision, repeating a pattern seen in June. On June 16, hike anxiety peaked the day before the Fed held its benchmark rate steady at 3.50% to 3.75%.
The probability of a July move has been anything but stable. The CME FedWatch tool showed roughly a 38% likelihood of a hike, up from around 12% a week earlier. At its peak intraday, there was a 46.5% chance the Fed would raise rates by a quarter point on July 29, according to CME FedWatch. The odds have since pulled back to around 35%, broadly consistent with the original copy.
Resurgent inflation tied to rising energy prices has prompted some forecasters to expect higher rates before year's end, a sharp reversal from the rate-cut calls that opened 2026. Oil prices surged in recent weeks, topping $100 a barrel, suggesting inflation may remain a stubborn issue in the near term.
The FOMC meeting is scheduled for July 28 and 29, with no Summary of Economic Projections set to be produced.It is unlikely that investors will gain much insight into Warsh's economic views, given that he has vowed to share less forward guidance.Nine of the panel's 18 officials pencilled in at least one rate hike for this year, though Fed Chair Kevin Warsh confirmed he did not include a projection of his own.
Warsh is widely seen as unlikely to raise rates at this week's meeting.Economists polled by FactSet predict the Fed will hold rates steady at 3.5% to 3.75%, which would mark the fifth consecutive meeting with no change. Even so, economists at Bank of America wrote that the spike in oil prices has made the meeting a close call, and that Warsh could tip the scales.
For crypto markets, the outcome is only part of the story. $BTC is hovering near $63,600 with positioning thinning ahead of the 2pm ET announcement. Traders already price in roughly 81% odds of a hike by September, meaning Warsh's tone on the autumn path is likely to drive more volatility than the rate decision itself.
Sources:CBS News: Will the Federal Reserve raise interest rates? Experts predict for July's meetingCNBC: A July rate hike from the Fed? The odds are risingMorningstar: What to Expect from the July Fed Meeting
