The US Federal Reserve held its benchmark rate at 3.5%-3.75% for the fifth consecutive meeting on July 29, with markets interpreting this prolonged pause as a signal that the tightening cycle is over. The yield curve twisted with long-term yields rising while short-term yields remained anchored, indicating that investors expect rate stability rather than further hikes. Three FOMC members (Beth Hammack, Neel Kashkari and Lorie Logan) dissented, pushing for a 25-basis-point increase, showing that a faction of the Fed considers the job unfinished amid persistent inflation. For risk assets and crypto, this configuration is favorable: peak rates reduce opportunity costs and a weaker dollar acts as a tailwind for dollar-denominated assets like Bitcoin.
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