Markets on Edge Ahead of Fed Decision: What to Expect Tonight

Emre Yumlu — Wed, 30 Jul 2025 10:48:05 +0000

The U.S. Federal Reserve is set to announce its latest interest rate decision later today, and global markets are watching closely. From Bitcoin to Treasury bonds, equities to commodities, every asset class is poised for potential movement depending on what the Fed says—or doesn’t say.

No Change in Rates Anticipated

Since the start of the year, the Fed has maintained its interest rates, and analysts expect this stance to continue tonight. Market pricing currently reflects a 98% probability that the central bank will hold rates steady.

Inflation Still a Wild Card

Although inflation showed signs of retreat in 2023, a 50 basis point rate cut in September 2024 was followed by a renewed uptick in price pressures, with inflation rising back to around 3%. Recent data shows it has eased slightly to 2.7%, but trade tensions and tariff-related uncertainty could keep inflation elevated in the near term.

Fed Chair Jerome Powell has repeatedly emphasized that ongoing tariff concerns are a key reason for the central bank’s cautious approach to easing.

Divisions Within the Fed

Consensus remains elusive inside the Fed itself. According to major U.S. financial outlets, figures like Christopher Waller and Michelle Bowman believe it’s time to begin cutting rates. Meanwhile, others argue that no reductions should take place at all throughout 2025.

The “dot plot” released in June reflected expectations for two rate cuts in 2025. However, no updated projections are expected during tonight’s meeting.

Political Tension: Powell vs. Trump

At 18:00 UTC, Fed Chair Powell will take the stage for his press conference—but interest isn’t limited to monetary policy. The restoration budget for the Fed’s headquarters has sparked controversy in Washington, and some speculate it could even jeopardize Powell’s leadership.

Last week, President Donald Trump visited the Fed building and publicly questioned the project’s cost. The tension between the two was noticeable during the visit, though it reportedly cooled off when Trump remarked, “All I really want from him is lower rates…”

Calm Before the Storm in the Markets

Markets remain unusually quiet in the lead-up to the announcement. Bitcoin is holding steady around $118,000, and volatility across digital assets has dropped significantly in recent days. U.S. Treasury yields are also little changed, reflecting market uncertainty about future rate directions and inflation trends.

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The post Markets on Edge Ahead of Fed Decision: What to Expect Tonight appeared first on Coin Engineer.

Bitcoin Pulls Back: Treasury Bonds and Options Pressure

Orhan — Tue, 26 Nov 2024 23:45:08 +0000

Bitcoin, after surpassing the $99,000 mark last Friday and reaching an all-time high, experienced a sharp pullback of over 3% within 24 hours. Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, pointed out that key factors behind this pullback include changes in the U.S. Treasury market and upcoming monthly options expirations.

According to Kendrick, the decline in long-term interest rates for U.S. Treasury bonds and the diminishing term premium are negatively affecting Bitcoin’s appeal in the short term. The term premium refers to the additional return investors demand for holding long-term bonds. Kendrick mentioned that Bitcoin is seen as a hedge against instability in the traditional financial system, and the drop in the term premium is creating pressure on Bitcoin.

“One of Bitcoin’s main use cases is as a hedge against traditional financial problems. Therefore, the decline in the term premium could weaken Bitcoin, at least in the short term.”

Long-Term Outlook Remains Strong

Kendrick remains optimistic about Bitcoin’s long-term outlook, maintaining a year-end target of $125,000, with the possibility of reaching $200,000 by the end of 2025.

Options Expirations Are Pressuring Bitcoin

Another factor affecting Bitcoin’s short-term price movements is the monthly options expirations that are scheduled for Friday. According to Deribit data, there are open positions for a total of 18,000 BTC in the price range of $85,000 to $100,000. Kendrick noted that this could limit price movements, and prices might stabilize as the expirations approach.

However, Kendrick emphasized that institutional demand remains strong, citing that since the U.S. elections, spot Bitcoin ETFs have purchased around 77,000 BTC, and MicroStrategy has acquired 134,000 BTC.

“MicroStrategy’s purchases are continuing without slowing down, and it’s unlikely they will sell. This could establish a floor for Bitcoin in the short term, in the range of $85,000 to $88,700.”

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