The Federal Reserve’s Federal Open Market Committee (FOMC) is meeting on July 28-29 to decide on interest rates, which have remained steady at 3.5%-3.75% since early 2026. Markets currently assign a 25-30% chance of a 25 basis point hike this week, but most anticipate a rate change in September instead.
Minutes from the June meeting reflect ongoing debate within the committee. Some members advocate for hikes to counter persistent inflation, now projected at 3.6% for 2026, which is well above the Fed’s 2% target. Others suggest possible rate cuts, showing divisions in approach despite the unanimous pause.
Since Fed Chair Kevin Warsh took the helm in May 2026, he has highlighted inflation as too high but hasn’t committed to specific moves for this meeting. Following the hawkish stance in June, both Bitcoin and Ethereum experienced declines between 2% and 5% as tighter monetary policy saps risk appetite.
Corporate Earnings Could Influence Fed’s Path
This week’s corporate earnings reports provide real-world insight beyond economic models, revealing how businesses are reacting to current borrowing costs. Investors will watch capital spending and future guidance closely. Pullbacks would confirm the Fed’s strategy is curbing economic activity. On the other hand, solid spending might push the Fed toward earlier hikes.
The odds of a September rate adjustment hover near 80%. Any hawkish signals or rising inflation data could boost that probability. Alternatively, a balanced or dovish Fed statement this week may ease concerns and offer relief for digital assets including Bitcoin and Ethereum.
