The FOMC at 2 a.m. Thursday is extremely important!

Powell previously used the “hint first, deliver later” playbook. Warsh’s defining trait upon taking office can be summed up in five words: anti-forward guidance.

Some people in the group are still asking whether there will be a rate hike, but I think the most important thing to watch is how the path is laid out after the hike.

Warsh doesn’t like making the path too clear, so the market will likely react even more aggressively. With August CPI coming in hot and Brent crude climbing back above $100, the probability of a 25 bp hike in September has reached 92%. The hike itself is almost no longer an event. What matters more is whether there will be further hikes, where the dot plot moves, and how Warsh talks around the issue. Those are the points we need to focus on.

Keep these three scenarios firmly in mind:
❶ 25 bp hike + dovish dot plot, “one and done”
➥This would be a relatively dovish surprise. The median year-end rate in the June dot plot had already reached 3.8%, which implied one hike this year. If the dot plot still shows 3.8% at the end of 2026 and does not move higher in 2027, while the press conference frames it as “a recalibration to offset oil prices and persistent inflation,” U.S. stocks could see an upward scenario of “initial volatility followed by recovery.”
❷ 25 bp hike + hawkish dot plot, another 1–2 hikes this year
➥The 10-year U.S. Treasury yield has already reached 5%, the 2-year is above 4.6%, oil is above $100, and core CPI rose 0.3% month over month. Warsh may very well remain firm and say: “We’re not done yet.” The crypto market will probably take a short-term hit.
❸No rate hike
➥This is basically a low-probability event and would be a major upside surprise. U.S. stocks, gold, and BTC would probably all take off.

Here’s my personal, admittedly humble view: What I’m most concerned about is a statement that meets expectations, an ambiguous press conference, and long-end yields that refuse to come down. That combination would be the most damaging to risk appetite.

The two things that would be fatal for BTC are a renewed strengthening of the dollar and continued increases in the 2-year yield. If the dot plot still shows a tight stance for 2027, risk assets will come under pressure again, and altcoins will suffer more than BTC. Conversely, if Warsh frames this as a recalibration and the dot plot does not turn more hawkish alongside futures pricing, the most likely short-term move will be short covering. BTC and ETH would rally first, not narrative-driven coins.

At 2 a.m. Thursday, you can skip watching the minute of the rate hike itself. The dot plot and the first half hour after the press conference are the real market movers. Bonds will price it in first, and crypto will follow.

Everyone, trade cautiously ahead of the FOMC and save your ammo!