The Federal Reserve’s rate-setting committee meets July 28-29, and the federal funds rate has been parked at 3.5%-3.75% since January 2026, but cracks in that consensus are starting to show.
Markets are pricing in a 25-30% probability of a 25 basis point hike at this week’s meeting. The stronger consensus points to September. Roughly 80% of market participants expect a rate adjustment by then, suggesting this week’s meeting may function more as a preview than the main event.
Minutes from the June 16-17 FOMC meeting revealed genuine disagreement among committee members. Some officials pushed for potential hikes to combat sticky inflation, while others floated the possibility of cuts. The rate itself was held unanimously, but the internal debate tells a more complicated story.
Fed Chair Kevin Warsh, who took the role in May 2026, has stated that inflation remains “too high” but stopped short of telegraphing any specific move for July. Revised 2026 inflation projections now average around 3.6%, well above the Fed’s 2% target.
After the June meeting’s hawkish hold, Bitcoin and Ethereum both dropped 2-5%. When the Fed keeps rates elevated or signals further tightening, cash liquidity tightens across the entire financial system, reducing speculative appetite for risk assets.
