Experts doubt a rate cut as the FOMC meeting wraps tomorrow; all eyes are on Fed Chair Powell’s statement on the path of interest rates.
Tomorrow marks the end of the Federal Reserve’s two-day meeting, and everyone is waiting to see what Fed Chair Powell will say about interest rates.
The Fed will probably maintain interest rates between 4.25 and 4.5%, even though US President Donald Trump has called for a rate drop.
This expectation is supported by Polymarket data, which shows a significant likelihood of no rate cut.
What To Anticipate As Fed Chair Powell Faces Increasing Pressure To Lower Interest Rates
The FOMC meeting of the Federal Reserve is set for July 29–30.
The cryptocurrency community anxiously anticipates Fed Chair Powell’s speech on July 30th, as his crucial interest rate decision is still pending.
The cryptocurrency market may see a bullish trend if the Fed adopts a dovish attitude, while the industry may suffer from a hawkish one.
However, experts are still skeptical of the Fed lowering interest rates.
Despite President Trump’s repeated calls for Powell to cut rates, the central bank has kept its target interest rate range at 4.25–4.50%.
Until the economic effects of Trump’s tariffs and inflation trends are better understood, the bank has taken a cautious “wait and see” stance.
Michael Gapen, chief U.S. economist at Morgan Stanley, said, “He’ll again emphasize patience,” emphasizing the slim chance of a rate cut.
The Fed has a 97% likelihood of keeping interest rates steady tomorrow, according to data from Polymarket.
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In contrast, Polymarket indicates a 2.4% chance of a 25-basis-point decline; a 50-basis-point or greater decline is regarded as extremely implausible at less than 1%.
Likewise, an increase of 25 basis points or more is considered unlikely, with a probability of less than 1%.
Will Fed Keep Taking “Wait, See” Approach?
The FedWatch tool from the CME Group indicates that investors anticipate a 62% chance of a rate cut in September.
By then, the Fed will have gotten important information from the jobs reports for July and August, which will help it decide whether to raise interest rates and give it information about how strong the labor market is.
According to some economists, the Fed may not lower rates this year, as they think a rate decrease in September could be premature.
Analysts anticipate that Fed Chair Powell would restate the Fed’s data-dependent approach, which means that new economic data, not a set timeframe, will inform future choices.
“The reality remains that the performance of the real economy also has a vote,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets.
It’s interesting to note that Fed Governor Chris Waller is supporting a rate cut in July, pointing to indications of underlying economic weakness.
He cites slow private-sector job growth as evidence that the economy requires assistance despite outward signs of strength.
A rate drop could stop further economic deterioration by lowering borrowing rates for individuals and companies.
