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FED July Decision Preliminary Situation: Expectations Remain Unchanged, But the Real Signal is from Warsh ✨

The countdown continues for the FED's July 28-29 meeting. The general market expectation is that the policy rate will remain stable between 3.50% and 3.75%. However, this meeting will be shaped more by the signals given by FED Chairman Kevin Warsh than by the interest rate decision itself.

Timing of the Decision

🔹 The FOMC meeting will be held on July 28-29.
🔹 The interest rate decision will be announced on Wednesday, July 29 at 9:00 PM Turkish time.
🔹 Warsh's press conference will begin at 9:30 PM Turkish time.

Data Behind the Expectation of a Fixed Rate

🔹 June CPI fell by 0.4% on a monthly basis and by 3.5% on an annual basis, falling below expectations. This was the first monthly decrease since May 2020.
🔹 Non-farm payrolls showed a weak increase of 57,000 in June.
🔹 While this data makes a rate hike more difficult, it also doesn't rush a rate cut due to rising energy prices and geopolitical risks.

Two Possible Scenarios After the Pause

🔹 Dovish Signal: If Warsh emphasizes that inflation is under control and addresses concerns about the economy, the market may interpret this as a sign that interest rate cuts could begin from September onwards. In this case, the dollar may depreciate, and gold may... Commodities like silver and stocks may rise, and a positive momentum may also be created for cryptocurrencies because low interest rates increase liquidity and risk appetite.
🔹 Hawkish Signal: Warsh's statement that the fight against inflation is not yet over and that energy prices pose a risk, indicating he will maintain a tight stance and not giving a clear signal of a rate cut for September, may lead to disappointment in the markets. The dollar will strengthen, and selling pressure may be created on risky assets.

Possible Effects on the Cryptocurrency Market

🔹 Positive Scenario: A dovish Fed weakens the US dollar, which could trigger a rise for cryptocurrencies, especially Bitcoin (BTC). A signal of a rate cut in September may direct investors towards risky assets.
🔹 Negative Scenario: A hawkish stance or lack of a clear signal may create downward pressure on the BTC price. High-leverage positions, in particular, may be at risk.

Conclusion

🔹 The market says wait until July. What is really important is what Warsh will say on the evening of July 29th and whether he will give any clues for the September meeting. Therefore, more than the decision text, the Fed Chairman's press conference and the statements he makes will determine the new direction of the markets.

DYOR 🔎
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