Fed’s Rate Announcement Tomorrow and Underlying Market Conditions as Folks Talk
Tomorrow’s FOMC rate decision from the Federal Reserve continues to cause some angst in the investment community as folks try to decipher Fed Chairman Kevin Warsh’s disdain for tea leaf reading. What is being missed by seemingly a lot of the crowd is the open signal from Warsh that he prefers to keep his outlooks rather muted, this because he appears to be focused on the mid and long-term economic picture.
Simply put, I do not think the Federal Reserve is going to raise interest rates tomorrow, nor will the Fed Chair give too much indication about his thoughts for mid-September. It might be stated in the Fed Press Conference afterwards that the costs of energy is being watched, but that is too obvious. Count on it being recorded that the Federal Reserve will watch data and react accordingly. In the meantime, financial institutions may demonstrate volatile overplayed USD centric positions which look overbought looking into the mid-term, as they still worry about the near-term.
10-Year U.S Treasury Yields Five Year Chart as of 28 July 2026
Political Questions and the Cost of Energy as the Fed Reacts
Let’s for a moment dive into politics. Does anyone think that Kevin Warsh doesn’t speak to Treasury Secretary Scott Bessent who has been a long-time associate? And does anyone think Bessent doesn’t have the constant voice of President Donald Trump in his ear?
The mid-term elections are nearing ladies and gentlemen. The de-escalation in the Iranian situation certainly has something to do with nations expressing wishes for less military action to the White House. Israel, the UAE, Kuwait, Bahrain, Iraq, Qatar, Saudi Arabia, Pakistan and Turkey are trying to influence positions as President Trump considers his next moves regarding alliances and resources. However, the situation may have something to do with the price of WTI Crude Oil too and its effect on U.S manufacturing and surprise, surprise the Federal Reserve.
Does anyone else remember that the last de-escalation also started just before the Federal Reserve’s last FOMC meeting in June? I am not being a conspiracy fanatic, just pointing out that lower WTI Crude Oil prices do help the case for a Fed outlook which looks at the costs of energy in a pro-active manner, one which might include the U.S economy and internal White House discussions with politicians who represent voters who have the power of creating a backlash. Lower interest rates equate into lower borrowing costs for consumers.
The Fed’s Impact on Equities and Forex (and the USD/JPY)
So if the Fed does not raise tomorrow, nor gives an indication of what it will do in September and offers a stance of ‘we are vigilant and will watch the economy’ will that help sentiment on the Nasdaq 100 which is starting to have the look of a patient with a bad cold who can’t quite seem to get rid of a cough? Microsoft and Meta step into the limelight tomorrow with earnings reports, Amazon and Apple follow on Thursday. The combination of the Fed and important quarterly earnings will impact Nasdaq sentiment and other equity indices.
It appears analysts of financial institutions are starting to discuss CAPEX – capital and expenditures – openly. And this is creating shadows as investors weigh the costs of energy and infrastructure against stated profit projections. However, let’s not throw the baby out with the bath water, the Nasdaq 100 has a gain of 20%+ over the past year (July to July), and since March the index has still gained 12%+. The war in Iran (excuse me, conflict) has not had a meaningful impact it appears on the outcome of the Nasdaq 100 via sentiment generated. But the shadow of expenditures, debt and revenue is getting louder bandwidth and speculators need to remain cautious in the indices.
Back to the Fed and Forex, the USD has been strong, you are allowed to say extremely strong if you have been betting on downside incorrectly. The USD/JPY is almost in nosebleed terrain, currently 163.830. The Bank of Japan will announce their interest rate policy very early Friday (for those of us not in Asia) and let’s see if the ‘independent’ Bank of Japan is taking a cue from their government which is clearly interested in continuing to build stronger export ratios. Has the Bank of Japan given up the so-called stated fight to keep the JPY within a solid stance? This is doubtful externally, and Japan is certainly not going to allow the USD/JPY to traverse wildly higher, but it may not consider the 165.000 mark as the end of the world. Beware of saber-rattling from the BoJ in the coming days.
Bitcoin Five Year Chart as of 28 July 2026
Doubts and Remarks Regarding Bitcoin Below $64K
On a last note, the world of cryptocurrency remains interesting and stormy. It appears from watching the awkward statements from influencers and crypto (including Bitcoin) media outlets the past couple of months, as they attempt to explain their pain and convince others that everyone should buy at these lower values that more troubles are coming.
What are the influencers, crypto media’s and importantly financial institutions’ actual skin in the game relative to those who have lost interest in Bitcoin and the digital market worth? Are influencers and large institutions like BlackRock hoping to pawn off their suffering ‘asset’ holdings to the public, while trying to convince us that today’s cheap prices represent buying opportunities? Is the wave of slanted influence and panic-like banner waving a hope to save themselves in order to cash out of a sinking market, this while hoping someone else takes their place in lifeboats that face a difficult voyage to safe harbors?
BTC/USD is near $63,4000 now. Yes, we know, we have been told plenty of times before that all the Bitcoin winters eventually turn into summer again. Blossoms will create the sweet scent of profit we are assured, but what if the winter becomes an ice age? What if Michael Saylor and his ability to produce complex financial statements and instruments for MicroStrategy and Strategy equity shares continue to make little mathematical sense? What if all the investors into Bitcoin and cryptocurrencies are left holding the bag and find themselves covered by permafrost? The tundra currently looks harsh. Will the Bitcoin crowd who has been so adamant about being free of regulatory controls and mismanaged central banks cry openly for bailouts from the U.S Treasury with USD? Now that would be entertaining.
