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

Old Powell's playbook was “signal first, deliver later.” Warsh's five-word persona upon taking office: anti-forward guidance.

Group members are still asking whether there will be a hike, but I think the key thing to watch is how the path is laid out after the hike.

Warsh doesn't like spelling out the path too clearly, so the market reacts even more aggressively. With August CPI running hot and Brent crude back above $100, the probability of a 25bp 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 dances around the issue whenever he speaks. That's what we need to focus on.

Keep the following three scenarios firmly in mind:

❶ 25bp 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%, implying one hike for the 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 upside scenario of “initial shakeout, then recovery.”

❷ 25bp hike + hawkish dot plot, 1–2 more hikes this year
➥The 10-year U.S. Treasury yield has already touched 5%, the 2-year is above 4.6%, oil is above $100, and core CPI rose 0.3% month-on-month. Warsh is very likely to remain tough and say: “Our job is not done yet.” The crypto market will probably take a short-term hit.
❸No hike
➥This is basically a low-probability event and would be a major upside surprise. U.S. stocks, gold, and $BTC would all likely surge.

Here is my personal, probably foolish opinion: what I am most wary of is a statement in line with expectations, a vague press conference, and the long end failing to come down. That combination is the biggest killer of risk appetite.
The two things that would be fatal for BTC are a renewed strengthening of the dollar and the 2-year yield continuing to rise. If the dot plot still shows 2027 as tight, risk assets will be pressured again, with altcoins suffering more than BTC. Conversely, if Warsh frames this as a recalibration and the dot plot does not turn as hawkish as futures, the most likely short-term move is a short squeeze. BTC and ETH would rally first, not narrative coins.

At 2 a.m. Thursday, you can skip watching the minute when the hike is announced. The dot plot and the first half-hour after the press conference are the real market action: bonds price it first, then crypto follows.
Folks, trade cautiously ahead of the FOMC and conserve your ammo!
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