The U.S. central bank will decide today on the next setting of interest rates, and this time investors are far from certain about the outcome as they were at many previous meetings. While the baseline scenario remains keeping rates unchanged, the market also admits the possibility of an increase. For bitcoin and other cryptocurrencies, not only the Fed’s verdict itself may be decisive, but especially what its chairman Kevin Warsh signals about the coming months.
The U.S. Federal Reserve System on Wednesday, July 29, 2026, will conclude a two-day meeting of the FOMC monetary committee. According to the official calendar of the U.S. central bank, the decision will be published at 2:00 PM Washington time. Half an hour later, Fed Chairman Kevin Warsh’s press conference will begin.
For financial markets, this is one of the week’s key events. While the Fed does not decide directly on bitcoin or other digital assets, its monetary policy influences the price of money, U.S. bond yields, the dollar exchange rate, and investors’ willingness to take risks. This is precisely why decisions by the U.S. central bank can significantly affect the cryptocurrency market as well.
Table of Contents:
- Fed Holds Rates at 3.50 to 3.75 Percent. Change May Come Today
- Bitcoin Waits Before the Fed
- 1. Fed Keeps Rates Unchanged and Softens Rhetoric
- 2. Rates Remain the Same, But Warsh Will Be Hawkish
- 3. The Fed Unexpectedly Raises Rates
- Why Do Interest Rates Affect Bitcoin?
- The Decisive Factor May Not Be Rates, But Expectations
- What to Watch Today Besides the Rates Themselves
- The Fed Can Set the Direction for Cryptocurrencies for the Coming Weeks
Fed Holds Rates at 3.50 to 3.75 Percent. Change May Come Today
The Fed is holding the target range for the federal funds rate at 3.50 to 3.75 percent. It last kept it in this range at its June meeting as well.
According to the Fed’s July Monetary Policy Report, U.S. inflation remains above the central bank’s long-term two-percent target. The Fed also notes that U.S. economic activity continues at a solid pace, the labor market situation is relatively stable, and productivity remains strong.
The central bank thus faces an uncomfortable dilemma. Raising rates too early could unnecessarily slow the economy, but waiting too long may increase the risk that inflation will settle more firmly above the Fed’s target again.
Moreover, the outcome is not entirely predetermined. Reuters reported before today’s meeting that futures markets are pricing in approximately a one-third probability of a rate increase. So the prevailing scenario is still to keep them unchanged, but the possibility of a surprise is substantially higher this time than at some previous meetings.
Bitcoin Waits Before the Fed
Tension ahead of the decision is also evident in the cryptocurrency market. Bitcoin has been trading around the $65,000 mark in recent days, without being able to start a more significant trend in either direction.
CoinDesk points out that today’s Fed decision may be one of the events that will determine whether bitcoin breaks through its current trading range or heads back toward June lows. Analysts are monitoring both the Fed and the strength of demand and inflows into cryptocurrency investment products.
Bitcoin’s sensitivity to expectations around U.S. rates was already visible in mid-July. After weaker-than-expected U.S. inflation data, the probability of an early rate increase dropped and bitcoin subsequently strengthened to nearly $65,000, as CoinDesk described at the time.
This evening therefore offers several possible scenarios.
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1. Fed Keeps Rates Unchanged and Softens Rhetoric
For cryptocurrencies, this would likely be the most favorable realistic scenario.
If the Fed keeps rates at the current 3.50 to 3.75 percent and Kevin Warsh also signals that further increases are not immediately necessary, investors might begin to expect more moderate monetary policy.
This could reduce pressure on U.S. bond yields and the dollar. In an environment of lower expected rates, investors’ willingness to seek returns in riskier assets typically increases.
Bitcoin, ethereum, and other major cryptocurrencies could therefore gain support.
However, this does not automatically mean the beginning of a long-term rally. Financial markets always move primarily on the difference between reality and expectations. If a more moderate Fed is already largely priced in, the initial reaction may be limited.
2. Rates Remain the Same, But Warsh Will Be Hawkish
Perhaps an even more interesting scenario involves keeping rates unchanged accompanied by a signal that their increase may come at one of the next meetings.
This is precisely why the press conference at 8:30 PM may be more important for cryptocurrencies than the actual rate announcement at 8:00 PM.
Moreover, Kevin Warsh since taking over as Fed chairman has been limiting classic “forward guidance,” i.e., the central bank’s attempt to prepare markets in advance for future steps. Reuters pointed out in July that this approach comes precisely at a time when some Fed officials are more openly discussing the need for further monetary policy tightening.
If Warsh emphasizes persistent inflationary pressures and prepares the market for a possible rate increase in September, U.S. Treasury yields could rise and the dollar could strengthen. For bitcoin and cryptocurrencies, this would be a rather negative combination.
3. The Fed Unexpectedly Raises Rates
The biggest short-term shock could come if the Fed raises rates today.
While the market is considering this possibility, it’s still not the baseline scenario. Reuters reports before the meeting that the barrier for an immediate rate hike remains relatively high. Some economists consider the first increase more likely in September.
For the cryptocurrency market, an unexpected rate hike could mean immediate pressure on prices.
Higher rates increase the attractiveness of safer dollar-denominated instruments while making capital more expensive in the economy. Investors may therefore reduce exposure to assets where they expect high returns but also assume significantly higher risk.
Smaller cryptocurrencies may be particularly sensitive. Bitcoin has the greatest liquidity and institutional presence in the cryptocurrency market, while with smaller altcoins, a rapid change in investor sentiment can trigger much sharper price movements.
However, even a rate hike doesn’t automatically mean a long-term decline for bitcoin. What would be crucial is primarily whether the Fed presents the move as a one-time reaction or as the beginning of a new cycle of rate increases.
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Why Do Interest Rates Affect Bitcoin?
Bitcoin was created outside the traditional financial system, but in shorter time horizons it often behaves similarly to other risky investments.
Interest rates are one of the reasons. When rates are low, conservative dollar-denominated assets offer lower returns and investors may be more willing to shift part of their capital to, for example, technology stocks or cryptocurrencies. Higher rates change this situation.
If investors can obtain attractive returns on, for example, U.S. Treasury bonds at substantially lower risk, the relative attractiveness of more speculative investments declines.
At the same time, higher rates can strengthen the U.S. dollar. And since bitcoin is traded globally primarily against the dollar, a stronger U.S. currency is often another complication for its price.
The Decisive Factor May Not Be Rates, But Expectations
One thing is primarily important: markets don’t react only to the actual decisions of central banks, but to how much the decision differs from what investors already expected.
If the Fed raises rates at a time when almost everyone is expecting it, the reaction may paradoxically be relatively small. However, if it leaves rates unchanged while unexpectedly signaling aggressive monetary policy tightening in the coming months, market movement could be much more pronounced.
This was also shown by the cryptocurrency reaction to July’s U.S. inflation data. According to CoinDesk, after their publication, the probability of a near-term rate hike dropped significantly and bitcoin responded with growth.
What to Watch Today Besides the Rates Themselves
Investors should therefore not only watch the first headline announcing the FOMC decision.
What will be crucial is primarily how the Fed assesses inflation, how much it fears further price growth, and whether Kevin Warsh signals a willingness to raise rates at one of the upcoming meetings.
The reaction of the U.S. bond market will also be important. U.S. Treasury yields have been rising in recent weeks and Reuters pointed out last week that ten-year U.S. yields reached 4.71 percent. Rising yields typically mean greater competition for risky assets, because investors can obtain higher returns even without assuming such significant risk.
If yields rise significantly after today’s meeting and the dollar strengthens at the same time, bitcoin could face additional pressure. A decline in yields and a weaker dollar could, conversely, help cryptocurrencies.
For bitcoin itself, it will also be good to monitor trading volumes. A significant price movement accompanied by strong volumes may be a more convincing signal than a brief sharp reaction without greater investor participation.
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The Fed Can Set the Direction for Cryptocurrencies for the Coming Weeks
Today’s meeting comes at a time when the cryptocurrency market is looking for a new, more significant impulse. Bitcoin has been moving around $65,000 in recent days and according to CoinDesk’s analysis, the outcome of the Fed meeting could help determine its next significant move.
Leaving rates unchanged may therefore not be enough for significant growth if the market expects it.
Much more important will be the answer to the question of what the Fed will do next. A hawkish Kevin Warsh and rising expectations of further rate increases could keep bitcoin and altcoins under pressure. Conversely, a signal that the U.S. central bank will wait for now with further tightening could increase investors’ willingness to return to riskier assets.
For cryptocurrencies, tonight neither begins nor ends with the actual publication of rates at 8 p.m. The real market direction may only be determined by the subsequent press conference of the U.S. central bank chairman.
