Fed Likely to Keep Rates Unchanged at July 19 Meeting

The Federal Reserve's upcoming FOMC meeting on July 19, 2025, is anticipated to maintain the current interest rate range of 4.25%–4.50%. Veteran trader Matthew Dixon has asserted a 96.9% likelihood that the Fed will keep rates unchanged, with a negligible 3.1% chance of a 25 basis points rate cut and zero probability of a rate hike. This prediction aligns with the broader market sentiment, which suggests the central bank is content to observe further economic data before making any policy shifts.

Dixon's analysis reflects the current economic landscape, where inflation has moderated but remains above the Fed's target. After starting the year at 3%, US inflation fell to 2.3% in April before rising to 2.7% in June. The unemployment rate has also shown stability, hovering around 4.1% to 4.2% from January to June, indicating a cooling but not collapsing job market. This economic backdrop provides the Fed with the flexibility to maintain a patient stance.

The Fed's previous meeting on June 18, 2025, saw the central bank keep its benchmark rate steady. While the Fed's dot plot continued to signal two cuts later in the year, an increasing number of officials—seven compared to four previously—favored no further cuts in 2025. This shift in sentiment reflects ongoing concerns over sticky inflation, despite the cooling of headline numbers. The last actual rate cut was on December 18, 2024, when the Fed reduced the rate by 25 basis points, following a series of cuts that began in September 2024.

Beyond economic indicators, the Fed faces growing political pressure. President Donald Trump has repeatedly criticized Chair Jerome Powell, urging aggressive rate cuts to stimulate growth and reduce government borrowing costs. Powell, however, has maintained that the Fed will continue making 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.

Matthew Dixon believes that a pause in rate hikes is mildly bullish for risk-on assets, including crypto. With no surprises expected from the Fed, the market has likely priced in the steady policy stance. Historically, stable or falling interest rates support Bitcoin and altcoins, as lower yields encourage risk-taking. Crypto markets tend to react sharply to unexpected Fed pivots, but in this case, the outlook appears calm, at least for now.

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 comfortable staying on pause. While political tensions continue to simmer, Powell’s team seems unlikely to act under pressure.