Citadel Securities sees possible July Fed surprise hike, pressure on Bitcoin

Citadel Securities raised the possibility of a 25-basis-point rate hike at the Federal Open Market Committee meeting on July 29, a move that could put short-term pressure on risk assets including Bitcoin if it lifts Treasury yields, CoinDesk reported. According to the outlet, Frank Flight, Citadel Securities’ head of macro strategy, argued Federal Reserve Chair Kevin Warsh could deliver a surprise hike at this meeting rather than in September, which he said could mark the end of the Fed’s practice of signaling policy shifts in advance. Flight added waiting until September would allow markets to already price in a hike, sharply weakening the effect of the policy signal, and said an earlier increase could also influence corporate pricing and wage negotiations, potentially avoiding greater tightening over the longer term. Still, market consensus, including Kraken economist Thomas Perfumo, expects rates to remain unchanged at this meeting. CME FedWatch showed the probability of a July rate hike had risen to 35.8%, but a hold remained the base-case scenario.