The Federal Reserve is widely expected to keep interest rates steady between 3.50% and 3.75% on July 29, marking a fifth consecutive hold since Kevin Warsh took over as Fed chair.
But TD Securities warns the U.S. dollar could weaken by 2% in the latter half of 2026 as markets have overstated the chances of a surprise rate hike. While CME FedWatch shows a 95% to 98% probability of no change, TD Securities believes geopolitical tensions, including rising oil prices and Iran-related uncertainties, have inflated the perceived risk of tightening.
Bitcoin’s recent dip to around $62,684 before recovering reflects some of this market jitteriness, losing about $134 million in long positions within a day. Mike McCluskey, co-founder of TX, noted that investors have been waiting patiently for weeks and warned that any hawkish signals or unexpected rate increases could push Bitcoin below $60,000 quickly.
TD Securities' take contrasts with the prevailing market mood, emphasizing that the Fed is unlikely to surprise with a hike this week despite current pricing. This outlook suggests the dollar might face downward pressure once the Fed confirms its steady stance.
This is informational content and not financial advice.
