The Federal Reserve will make its decision on interest rates on Wednesday. Almost all economists expect no change. Traders are much less confident.
This gap is important. If the Fed surprises, stocks, bonds, oil, and Bitcoin (BTC) all move quickly. Bitcoin traded near $64,915 on Monday, up 0.7%.
Economists say wait, traders say maybe not
The Federal Reserve’s key interest rate ranged between 3.50% and 3.75% during four meetings. Set of facts consensus He says he stays there.
Reuters he asked 104 economists in mid-July. He said all 104 knots. 78 people expected no change during December.
Traders tell a different story. Fed funds futures put the chance of a 13% rate hike a week ago. By Friday, the percentage had jumped to 38%. It is now close to 36%.
“We are currently witnessing the greatest hesitation by markets regarding the expected outcome for some time,” said analyst Martini Gay. male.
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The two camps aren’t really arguing. Economists determine the only possible outcome. Futures price all outcomes, including improbable outcomes.
The palette is also changing. Most of those same economists now rate the chance of a rate hike later in 2026 as high. A month ago, most of them said low.
Why doubt? President Kevin Warsh has I stopped hinting at what would come next. The Fed will not publish new forecasts either. This leaves traders guessing before then Central Bank decisions for this week.
“Also absent is the so-called forward guidance, which we agreed was not entirely appropriate for the current political situation.” He said Wars.
Gregory Daco of EY-Parthenon sees a rate hike in July as unlikely. However, it puts the rest of the year at 60-40. Former Fed Governor Larry Meyer expects confirmation but sees Lori Logan and Beth Hammack voting against it.
Oil and tariffs brought back inflation
Oil is the trigger. Brent crude closed at $100.69 on July 23its first close above $100 since May 26. Prices have risen more than 30% this month.
The higher cost of oil means higher fuel costs, which leads to higher inflation rates. Weekend A pause in Iran’s strikes Things have calmed down a bit
Tariffs came next. On Friday, the United States added new import taxes of 10% and 12.5% on 60 goods Business partners.
These replace tariffs that were struck down by the Supreme Court in February, using a law that is difficult to challenge.
Bond markets reacted. The 10-year Treasury yield closed on Friday at 4.69%. higher Since January 2025. This is the rate the US government pays to borrow for ten years.
The two-year return is the real truth. It ended the week at 4.33%, above the Federal Reserve’s ceiling of 3.75%. Bond traders are already bracing for higher rates.
What does it mean for Bitcoin
Bitcoin is trading near $64,915. This is about 49% lower than the record $126,080 set in October 2025.
When safe bonds pay 4.69%, risky bets look less attractive. This capped Bitcoin throughout the month.
The interest rate hike would be the first of its kind by the Fed since July 2023ending three years of suspension and cuts.
Calmness can do the opposite. Bitcoin stalled near $66,000 earlier this month, when… Inflation fears caused by artificial intelligence The gathering culminated.
Warsh speaks 30 minutes after the decision. With forecasters and traders far apart, his tone will matter more than the vote. Priced results rarely move markets. Surprises do.
this post The Federal Reserve’s decision puts 104 economists in the face of a bet on a 36% interest rate hike. appeared first on BeInCrypto.
