Citadel expects Fed to raise interest rates this week, and crypto markets should pay attention

Citadel Securities thinks the Federal Reserve is about to do something most of Wall Street isn’t expecting. The firm’s macro strategist Frank Flight has projected that the Fed will raise interest rates by 25 basis points when the FOMC wraps its meeting on July 30, pushing the federal funds rate from its current 3.5% to 3.75% range up to 3.75% to 4%. If that sounds like a contrarian call, it is. A Reuters poll of economists found that most expect the Fed to hold rates steady, right where they’ve been since early 2026. CME FedWatch data as of July 13 pegged the probability of a hike at roughly 46.5%, meaning the market is close to a coin flip but still leaning toward no change. Why Citadel thinks Warsh pulls the trigger The logic behind Citadel’s call centers on Fed Chairman Kevin Warsh and what Flight describes as an effort to reinforce Warsh’s credibility on inflation. Think of it as a trust exercise, except instead of falling backward into someone’s arms, Warsh would be hiking rates into an economy that many participants believe doesn’t need the extra tightening. Warsh has reportedly been looking to reduce the Fed’s reliance on forward guidance, that practice of telegraphing rate ...