No Rate Hike Expected—But Is Powell’s Exit the Real Shock at Fed Meeting?

As the Federal Open Market Committee (FOMC) prepares to convene for its highly anticipated July 29–30 meeting, global financial markets are bracing for a pivotal moment. While the Federal Reserve is widely expected to hold interest rates steady, the real drama may lie outside the confines of central banking policy. Former President Donald Trump’s latest remarks have introduced a wave of political uncertainty that could reverberate far beyond the Fed’s press conference.

According to Kalshi, a real-money prediction platform known for its accuracy in forecasting economic events, there is a 95% probability that the Federal Reserve will not raise interest rates during this meeting. Only 5% of participants foresee a potential 25 basis point cut, while a negligible fraction—less than 1%—anticipate a more aggressive move.

This consensus reflects current economic trends: a gradually softening labor market, easing inflation, and a cautious Fed wary of overcorrecting. Despite this sense of calm, Wall Street isn’t fully at ease. The real question now is not just whether the Fed will pause—but what comes next.

Forward Guidance Takes Center Stage

The Fed’s decision on July 30 is expected to maintain the status quo on interest rates. However, attention is rapidly shifting toward forward guidance, which refers to the central bank’s communication about its future policy intentions. With market participants pricing in at least two rate cuts between now and early 2026, the Fed’s tone could have a decisive impact on asset prices—especially in the crypto sector.

Source: X

Over the past week, Bitcoin and Ethereum have posted modest gains, reflecting investor optimism about a dovish shift. Yet, both assets experienced slight pullbacks in the last 24 hours as traders began hedging against unexpected volatility. In the broader context, crypto traders often respond swiftly to macroeconomic cues. A more accommodative Fed could drive renewed enthusiasm in digital assets.

Trump’s Unexpected Bombshell on Powell

Just as markets seemed to find equilibrium, former President Donald Trump upended expectations with a cryptic yet pointed message posted to Truth Social: “Powell is leaving very soon. I’ll miss him.” The statement, which lacked any formal clarification, has triggered a wave of speculation across financial and political circles alike.

Will Jerome Powell resign during the FOMC meeting? Is Trump merely posturing for influence ahead of a possible re-election bid? Regardless of intent, the timing of his remarks has introduced a secondary narrative—one of leadership instability at the Federal Reserve.

It’s no secret that Trump and Powell have had a strained relationship. During Trump’s presidency, he frequently criticized Powell’s monetary stance, accusing him of being overly cautious and damaging to growth. If Powell were to exit prematurely, his replacement could dramatically alter the Fed’s course, potentially accelerating rate cuts—or introducing new uncertainties.

Crypto Markets Juggle Policy and Politics

Amid this whirlwind, the global cryptocurrency market is showing mixed signals. As of this writing, total crypto market capitalization sits at $3.91 trillion. Daily trading volume has surged nearly 44% to $176.18 billion, suggesting heightened trader engagement ahead of the Fed decision.

Despite slight declines in Bitcoin and Ethereum prices, market sentiment remains bullish. The current Crypto Fear & Greed Index shows a "Greed" level of 75, indicating confidence among investors. However, that sentiment could change rapidly if Powell’s position comes under further scrutiny.

Analysts warn that traders must look beyond the rate decision itself. “The bigger story isn’t whether there’s a cut or not,” says Sarah Li, chief macro strategist at CryptoWatch Global. “It’s who will be leading the Fed when those cuts eventually happen. That leadership will shape everything—from inflation targeting to crypto regulation.”

Wall Street’s Eyes on the Fed’s Next Chapter

Financial institutions are also recalibrating their outlook. JPMorgan Chase and Goldman Sachs have revised their expectations for rate cuts, now predicting easing to begin as early as December 2025. These forecasts are driven by declining job openings, tepid wage growth, and waning consumer spending.

Still, the Fed has emphasized a data-driven approach. Any signs of resilience in inflation or GDP growth could delay the start of monetary easing. In this delicate environment, even subtle shifts in tone during Fed Chair Powell’s press conference could sway billions in capital flows.

Trump and the Politics of the Fed

Trump’s influence over the Fed—while technically indirect—remains potent. As a frontrunner in the 2026 presidential race, his comments carry considerable weight. If Powell were indeed to step down, Trump’s eventual nominee could signal a seismic shift in monetary philosophy. Historically, Trump has favored low interest rates and monetary stimulus to spur economic growth.

But Powell’s tenure, marked by a blend of caution and responsiveness, has earned him credibility across party lines. A sudden departure could rattle investor confidence in the Fed’s independence, a cornerstone of U.S. economic policy.

Conclusion: A Calm Exterior, Unsteady Ground Beneath

This week’s FOMC meeting may end with no rate changes, but the undercurrents suggest anything but normalcy. On the surface, the Fed appears poised to stay the course. Beneath, however, lies a swirl of uncertainty powered by Trump’s provocative remarks and the ongoing evolution of the U.S. economic landscape.

Investors—particularly those in volatile markets like crypto—must prepare for dual risks: the trajectory of monetary policy and the stability of central bank leadership. As Powell takes the podium next week, markets will be listening not just for numbers, but for nuance.

Writer @Ellena

Ellena is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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