96.9% Chance Fed Holds Steady: A Tale of Rates and Rhetoric 📈💰

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The next Federal Reserve FOMC meeting, scheduled for July 19, 2025, is a veritable feast of anticipation, and the central bank’s decision is the main course. Veteran trader Matthew Dixon, in a tweet that could rival the clarity of a crystal ball, has declared a 96.9% chance that the Fed will keep interest rates unchanged at 4.25%–4.50%. The probability of a rate hike, you ask? A resounding zero. 🙅‍♂️

Dixon, ever the optimist, also mentions a minuscule 3.1% chance of a 25 bps rate cut, but he’s quick to add that the Fed’s current mood is one of steadfast inaction. His forecast aligns with the broader market sentiment, which suggests that the central bank is content to sit back and watch the economic data parade before making any grand gestures. 🎭

#Fed is Expected to Hold Rates Steady

96.9% probability the Fed will keep the target rate at 4.25%–4.50%
3.1% probability of a rate cut to 4.00%–4.25%
0% probability of a rate hike

1. No Surprise Expected
The market is almost fully priced in for a pause, meaning…

— Matthew Dixon – Veteran Financial Trader (@mdtrade) July 16, 2025

June FOMC Meeting Shows Shift in Fed Sentiment Toward Fewer Cuts

The FOMC meeting on June 18, 2025, was a masterclass in the art of doing nothing. The Fed, in its infinite wisdom, decided to keep its benchmark rate steady. The dot plot, that mystical chart of future rate predictions, continued to hint at two cuts later in the year. However, an increasing number of officials—seven, to be precise—now favor no further cuts in 2025. This growing reluctance is a testament to the Fed’s ongoing battle with sticky inflation, even as the headline numbers have cooled like a summer breeze. 🌞

The last actual rate cut, a mere 25 basis points, occurred on December 18, 2024. This was the third cut in a series that began in September 2024 with a surprise 50 bps cut, followed by another 25 bps cut in November. The Fed, it seems, was in a generous mood that autumn. 🍂

Economic Data Suggests No Urgency for Fed Action

At the heart of this decision-making lies the inflation trend. After starting the year at 3%, US inflation fell steadily to a low of 2.3% in April, before inching back up to 2.7% in June. This suggests that while inflation has moderated, it’s not yet decisively under control. The Fed, ever the cautious guardian, is not about to declare victory just yet. 🛡️

The US unemployment rate, a barometer of economic health, has remained relatively stable. From 4% in January, it rose to 4.1% in February and hovered around 4.2% through May, before settling back at 4.1% in June. This level signals a cooling—but not collapsing—job market, giving the Fed the luxury of patience. 🕒

Trump Targets Fed Chair Powell in Battle Over Interest Rates

Beyond the economic indicators, the Fed faces a more formidable adversary: the executive branch. President Donald Trump, a man of few words and many tweets, has repeatedly criticized Fed Chair Jerome Powell, urging aggressive rate cuts down to 1% to stimulate growth and reduce government borrowing costs. Powell, ever the stoic, has stood firm, stating that the Fed will continue to make data-driven decisions, regardless of political pressure. 🤼‍♂️

This clash between the executive branch and the central bank has drawn global attention, especially given the proximity to the 2026 election cycle. The world watches, and the Fed, it seems, is determined to remain above the fray. 🌍

Crypto Markets Welcome Rate Stability, Says Matthew Dixon

Matthew Dixon, ever the market sage, believes that a pause in rate hikes is mildly bullish for risk-on assets, including the ever-volatile world of crypto. With no surprises expected from the Fed, the market has likely priced in the steady policy stance. Historically, stable or falling interest rates have been a boon for Bitcoin and altcoins, as lower yields encourage risk-taking. 🚀

Crypto markets, known for their dramatic reactions to unexpected Fed pivots, seem to be taking this news in stride. For now, at least, the outlook appears calm. As the Fed heads into its July 19 meeting, the message from both the markets and insiders like Dixon is clear: no change is coming. Inflation is manageable, employment is steady, and the Fed appears content to stay on pause. While political tensions continue to simmer, Powell’s team seems unlikely to act under pressure. 🌋

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2025-07-16 13:58