The Federal Open Market Committee (FOMC) meeting is scheduled for July 28 and 29, with the rate announcement expected on Wednesday afternoon. The current target range stands at 3.50-3.75% and has remained unchanged since the June meeting, which was the first for Warsh as Chairman. The CME Group's Fedwatch tool, which calculates probabilities based on 30-day federal funds futures prices, estimates a 66.3% probability of rates remaining unchanged.
Prediction Markets Lean Toward Unchanged Rates
Prediction markets show a similar picture with slightly different figures. The Kalshi contract on the Fed's decision, with trading volume exceeding $42 million, indicates a 73% probability of unchanged rates—this figure has surged after a 10-percentage-point shift toward this outcome in recent days. The probability of a 25-basis-point hike is 26%, while the likelihood of a more significant hike is less than 1%.
Citadel Securities' Unconventional Forecast
Frank Flight, Head of Macro Strategy at Citadel Securities, has broken from this consensus. In a client note reported by Bloomberg on July 27, Flight expressed the view that the Fed could unexpectedly raise rates by a quarter percentage point this week, although most analysts still expect rates to remain unchanged.
Flight joined Citadel Securities in late 2025 after seven years at Goldman Sachs, where he rose to Vice President for Interest Rates and Macro Strategy, and later held portfolio manager roles at Brevan Howard and Soros Fund Management. In April, Financial News included him in its "Rising Stars of European Finance" list, highlighting his work across asset class valuations.
His reasoning is based more on a question of credibility than on any single inflation indicator. This line of argument holds weight because central bank communication is often assessed over several meetings, not one. Raising rates now, he wrote, would reinforce Warsh's stated commitment to price stability and signal that the Fed no longer needs to announce each move well in advance.
Flight has held this stance for several months. In a note dated June 19, he described the Warsh-led Fed as transitioning from an inertial, data-dependent stance to an adaptive one that reacts quickly to inflation deviations. He then pointed to the July meeting as the immediate opportunity and maintained rate hike forecasts for September, December, and March 2027 in his outlook. Consistency has been a defining feature of this forecast: the July meeting remained central to this concept, not adjusted to align with shifting market expectations.
Trump Again Pressures for Lower Rates
On July 27, President Trump spoke with journalists aboard Air Force One, calling Warsh "fantastic" while simultaneously insisting on lowering borrowing costs. He stated that Warsh wants to do the right thing but characterized other Fed board members as politicized, adding that some of them might have bad intentions.
Trump asserted that rates should come down and that with lower rates, the country's economy could grow at an annual pace of 8% to 12%. He reiterated his long-standing view that the U.S. should have the world's lowest interest rates, adding that rates here are higher than in the Eurozone, Japan, and China.
Trump insisted that the Fed must lower rates and that other countries pay much less to borrow. He noted that Warsh would still have to work with the rest of the board, reminding that the Chair sets the tone for discussion but does not set policy alone.
Trump has been pressuring the Fed to lower rates since his return to office in January 2025 and previously called for cuts to 1% or below. Some Fed officials, including Dallas Fed President Lorie Logan, have recently expressed concerns about persistent inflation and a willingness to, on the contrary, raise rates.
Inflation and Oil Offer No Clear Forecast
May Consumer Price Index (CPI) data, showing a 4.2% year-over-year increase primarily driven by energy costs, keeps the possibility of a rate hike alive, even though most market participants lean toward unchanged rates. Volatility in oil prices related to Middle East events adds another layer of uncertainty ahead of Wednesday's meeting. Sentiment in interest rate markets has gradually shifted: where the meeting was once seen as routine, it is now acknowledged that enough uncertainty remains to justify hedging both outcomes.
What This Means for Bitcoin and Risk Assets
Bitcoin tends to react more sharply precisely when the Fed deviates from expectations, rather than when it delivers a consensus-aligned decision. Unchanged rates, still the market's baseline scenario, are likely to leave crypto traders' positions largely unchanged heading into the announcement. An unexpected rate hike, which Flight continues to highlight, would likely have broader repercussions.
A rate hike typically strengthens the dollar and redirects capital to fixed-income assets—a trend that has repeatedly pressured Bitcoin and altcoins during previous monetary tightening cycles. Traders tracking ETF flows and derivatives positioning ahead of Wednesday will look for signs that institutional investors are quietly building downside protection, rather than opening outright bearish positions.
This distinction often matters more than the headline probabilities, as hedging often begins before expectations shift on futures or prediction markets. For traders assessing their positions ahead of the decision, the situation resembles previous weeks leading up to Fed meetings. When policy aligns with expectations, the initial price move in Bitcoin and major altcoins often fades quickly as traders unwind event-driven positions.
When the Fed surprises markets, liquidity can dry up within seconds, allowing prices to move much further than consensus forecasts anticipate.
What Comes Next
Keeping rates unchanged would extend the current range for a third consecutive meeting and shift focus to September, where the probability of a quarter-point hike already stands at 54.3% according to CME Fedwatch. A hike this week would mark the first move under Warsh's tenure and likely lead to rising short-term bond yields and a stronger dollar heading into the fall.
After the decision on Wednesday, Warsh will take questions from journalists. This press conference, along with the statement itself, will show whether the committee continues to signal a measured course or begins to lay the groundwork for the more nimble monetary policy response that Flight has been discussing since June.
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