The Federal Reserve is widely expected to leave interest rates unchanged on Wednesday, with the CME FedWatch tool pricing a hold at 68.5% as of July 28. The market focus has shifted to the September meeting, where the probability of higher rates sits at 77.4%, made up of a 56.3% chance of one quarter-point hike and a 21.1% chance of two hikes by then. This marks Kevin Warsh's first genuinely contested meeting as Fed chair, coming after he eliminated forward-guidance language from the June statement and declined to submit his own economic projection. The timing coincides with a reversal in the oil spike that initially drove September tightening bets, with Brent crude falling back to $86.68 and WTI to $81.25 at press time. The policy direction carries direct implications for the dollar, rate-sensitive tech stocks that just sold off, and crypto markets where Bitcoin slipped under $63,000 with over $600 million in leveraged positions liquidated over 24 hours.
CME FedWatch Prices 77.4% Probability of Higher Rates by September
The Federal Open Market Committee meets Tuesday and Wednesday, with its statement due at 2:00 p.m. ET on July 29, per the Federal Reserve's calendar. The CME FedWatch tool prices a hold at 68.5% as of July 28, against a 31.5% chance of a quarter-point hike, which would be a fifth consecutive pause at 3.50% to 3.75%. A 50 basis-point move is effectively off the table.
September is where the real bet sits. FedWatch puts the odds that rates are higher by the September meeting at 77.4%, made up of a 56.3% chance of one quarter-point hike and a further 21.1% chance of two by then. The two-hike probability has eased from 25.8% on Monday to 21.1% on Tuesday as crude fell. The June Summary of Economic Projections showed nine of eighteen officials penciling in at least one hike this year, with projected PCE inflation at 3.6% for 2026, well above the 2% target.
Warsh Eliminated Forward Guidance from June Statement
The information is not in the decision but in how it is explained. Warsh eliminated forward-guidance language from the June statement and declined to submit his own economic projection, breaking with convention. He has spoken publicly about wanting a "good family fight" over rates, a phrase Fortune reported he has used 13 times since April as he pushes for what he calls regime change at the Fed.
The practical effect is that Wednesday's roughly 130-word statement, and the 2:30 p.m. ET press conference that follows carry more weight than any Fed communication in years. With no dot plot and no guidance sentence to anchor expectations, every clause will be parsed for whether the committee is preparing the ground for September. Warsh has repeatedly pledged a "resolute commitment" to price stability and said the Fed has "no tolerance" for elevated costs.
Dollar, Tech Stocks, and Crypto React to Tightening Bias
Rate-sensitive tech is the trade already under stress. Alphabet fell roughly 7% after earnings, and Intel and Tesla dropped despite beating estimates, as the market repriced the leveraged AI-capex buildout against a less accommodative rate path. Long-duration equity, whose value sits in distant future earnings, is the most exposed to higher-for-longer rates.
Crypto sits in the same risk bucket. Bitcoin slipped under $63,000 into the meeting and was trading around $63,489 at press time, with sentiment back in fear and more than $600 million in leveraged positions liquidated over 24 hours as spot ETF flows turned defensive. The dollar is the cleanest expression. Widening policy divergence, a Fed holding or hiking while other central banks ease, supports the greenback and pressures the currencies funded against it.
FAQ
What did the CME FedWatch tool show for the July Fed meeting?
The CME FedWatch tool priced a hold at 68.5% as of July 28, against a 31.5% chance of a quarter-point hike. The Federal Open Market Committee's statement is due at 2:00 p.m. ET on July 29.
Why did Kevin Warsh eliminate forward guidance from the Fed statement?
Warsh eliminated forward-guidance language from the June statement and declined to submit his own economic projection, breaking with convention. He has spoken publicly about wanting a "good family fight" over rates and pushes for what he calls regime change at the Fed.
How did tech stocks and crypto react to the Fed's tightening bias?
Alphabet fell roughly 7% after earnings, and Intel and Tesla dropped despite beating estimates. Bitcoin slipped under $63,000 with over $600 million in leveraged positions liquidated over 24 hours as spot ETF flows turned defensive.
