The Fed kept its rates unchanged at 3.50-3.75% at its July meeting with a 9-against-3 vote, breaking with June’s unanimity: three regional bank presidents voted in favor of an immediate rate hike. This split within the committee triggered an immediate recalculation by markets, with the probability of a September rate hike surging from approximately 55% to 72% after Jerome Powell’s press conference. Bitcoin, which had climbed to $64,400 when the status quo was announced, dropped below $63,500 as soon as the Fed chair began speaking, resulting in over $600 million in positions being liquidated within 24 hours. Powell’s uncompromising tone on inflation confirmed that the Fed was not considering any near-term easing, weighing on all assets sensitive to monetary conditions.
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