Coindesk reported that U.S. hedge fund Citadel Securities raised the possibility of a 25bp benchmark interest rate hike at the Federal Open Market Committee (FOMC) on the 29th (local time). If the hike materializes, treasury yields would rise, potentially creating short-term pressure on risk assets such as Bitcoin. According to the media, Frank Flight, Head of Macro Strategy at Citadel Securities, argued that if Fed Chair Kevin Warsh were to make a surprise hike at this meeting instead of in September, "it could be an opportunity for the Fed to end its practice of pre-announcing policy changes." He added, "If they wait until September, the market will already anticipate the hike, significantly weakening the effect of the policy signal," and analyzed that an early hike would also influence corporate pricing and wage negotiations, potentially avoiding greater tightening in the long run. However, market consensus, including Kraken economist Thomas Perfumo, expects an interest rate freeze at this meeting, and while the probability of a July rate hike according to CME FedWatch has risen to 35.8%, a freeze remains the baseline scenario.
