Fed's July Interest Rate Decision Outlook: Is it Set to Remain Unchanged? Expectations of Rate Cuts May Affect Crypto Assets Market

On the eve of the FOMC meeting on July 29-30, despite President Trump once again pressuring for a rate cut, the market expects the Fed to maintain the Intrerest Rate unchanged for the fifth consecutive time (with a probability as high as 96.9%). The federal funds rate is expected to remain stable at 4.25%-4.5%. However, the expectation of a rate cut within the year (especially twice) still exists, and Powell's post-meeting statements and the meeting minutes will serve as crucial indicators, potentially having a profound impact on the inflation path and market Liquidity that cryptocurrency investors are concerned about.

Trump continues to exert pressure, but the Fed remains unmoved On the eve of the Fed FOMC meeting (July 29 to 30), U.S. President Donald Trump once again urged the Fed to cut interest rates. However, the market widely expects Chairman Jerome Powell and his committee to maintain interest rates unchanged for the fifth consecutive time at this meeting.

The July meeting is almost certain to remain unchanged According to the CME FedWatch tool, the probability that the Fed will keep interest rates unchanged at the meeting on July 30 is as high as 96.9%. If this is the case, it would mark the Fed's fifth consecutive decision not to cut interest rates this year. Since the FOMC meetings in January, March, May, and June, the target range for the federal funds rate has remained at 4.25% to 4.5%. Powell and the committee have emphasized that it is best to continue monitoring the actual impact of Trump's tariffs and other economic policies on inflation.

Despite the president's continued calls for interest rate cuts, the Fed has so far maintained its stance. During a visit to the Fed last week, Trump again urged Powell to lower interest rates, pointing out that the U.S. economy is currently performing strongly. Today (July 29), during a press conference while visiting Scotland, Trump reiterated that the Fed must cut interest rates. He believes the economy is performing well without rate cuts, but would perform even better with them. He criticized Powell again, stating that "smart people" should take action to lower rates.

Calls for Rate Cuts: Views from the President and Some Experts Apart from Trump, some market experts also believe that a rate cut by the Fed is appropriate. According to the crypto assets media CoinGape, before the FOMC meeting, BlackRock's Chief Investment Officer Rick Rieder suggested that lowering interest rates would help reduce housing prices and alleviate inflationary pressures, which is significant for crypto investors focusing on inflation-hedging assets such as Bitcoin.

The expectation of two interest rate cuts within the year still exists, and the crypto market closely follows the shift in liquidity Although the meeting is very likely to keep the Intrerest Rate unchanged, prediction platform Polymarket data shows that the market believes there is still a 38% chance that the Fed will lower rates twice this year. In addition, the probability of a single rate cut is 23%, and the probability of no rate cuts this year is 20%. There is even a 10% chance of three rate cuts. Given that there are three more meetings in September, October, and December after the July meeting, the possibility of a rate cut this year still exists even if no action is taken this month.

Future Guidance and Potential Paths Powell's press conference after the July FOMC meeting and the subsequent release of the meeting minutes will provide critical guidance for the market, clarifying the Fed's current stance and whether it is open to rate cuts later this year. This is crucial for assessing the macroeconomic environment and potential changes in market liquidity, and crypto assets traders need to follow closely.

Mary Daly, the president of the San Francisco Fed, recently supported the view of two interest rate cuts this year, stating that this outlook is "reasonable." She suggested keeping interest rates unchanged at the July meeting but also warned against maintaining rates at a high level for too long, as it could harm the economy. This implies the possibility of a future policy shift, which crypto investors should pay attention to as it may boost the valuation of risk assets.

Conclusion: The market generally expects the Fed's July decision to be "hawkish and stable," maintaining its position for the fifth consecutive time. However, under the pressure from the president, expert opinions, and economic data, the expectation of interest rate cuts this year (especially twice) remains a focal point for the market, particularly the possibility of starting the rate cut cycle in September or October. Powell's post-meeting statements will be the most important clue for assessing the timing of a policy shift, and any dovish signals he releases may reshape the market's expectations for the inflation outlook and risk assets (including Crypto Assets). Crypto investors need to prepare for potential market volatility.