Based on current projections from the CME Rate Watch tool, the federal funds rate is expected to rise to a range of 525 to 550 bps

The US Federal Reserve is expected to disclose its interest rate decision on July 26, Wednesday. At 18:00 UTC (14:00 ET), the Fed is likely to announce a rate hike to a range of 5.25 per cent-5.5 per cent, followed by a news conference by Chairman Jerome Powell.

As per a poll taken by Reuters among 106 economists, this will likely be the last rate hike for some time. Based on Fed funds futures, investors expect the central bank will maintain current interest rates until early 2024.

Based on current projections from the CME Rate Watch tool, the federal funds rate is anticipated to increase to a range of 525 to 550 bps. This would be the highest level in almost 17 years.

Stocks have increased and investors’ expectations of further tightening have been reduced since the Fed’s meeting in June as they take into account the strength of the labour market and the drop in inflation to expect a soft landing for the economy.

It has been strange to see how the crypto market has withstood recent statements about the economy in general. Bitcoin’s price has been quite steady over the previous two months, shifting between $29,000 and $31,500 with just a few short spikes around this range.

At one point, Bitcoin was changing hands at $29,303 as per CMC. Lately, the crypto market is consolidating in a tight range, with investors paying close attention to forthcoming policy updates.

When the Fed increases interest rates, borrowers face higher costs, which may make riskier investments less attractive. Nevertheless, if interest rates were to drop, as they have over the past decade, this would possibly result in a surge in speculative investments.