Reuters published its latest survey on July 21, 2026, presenting a very clear picture of the current interest rate expectation being “locked at a high level”: in an expanded sample of 104 economists, all respondents believe that the Federal Reserve will maintain the federal funds rate in the range of 3.50%-3.75% during the July 29 meeting, with 78 of them further expecting that this level will not be adjusted for the entire year of 2026. Compared to the result in the June survey where “out of 102 people, 78 predicted no movement for the whole year,” not only has the number of those maintaining high rates remained the same this month, but there is also a rare consensus in the expectation of maintaining the status quo on short-term rates, effectively reinforcing the trading framework of “high rates for longer” on a data level. The federal funds rate is the core benchmark of global dollar short-term interest rates and financing costs. The high-rate environment raises the yields of low-risk dollar assets such as government bonds and money market funds, compressing the valuation space that risk assets can tolerate. For BTC and ETH, which do not generate interest or dividends and depend primarily on price appreciation and volatile trading for returns, maintaining the rate level at 3.50%-3.75% for a longer time means that the pricing of on-chain dollar asset yields will continue to revolve around costly funds, and the consensus of the Federal Reserve not lowering interest rates is continuously eroding the risk appetite and funding endurance of crypto assets through more expensive dollar leverage and more attractive risk-free returns.
Reuters Survey Consensus: High Rates May Last Through 2026
From Reuters' surveys in June to July, the judgment of “no change for the whole year” is shifting from a “majority opinion” to a “market consensus”: the sample in June consisted of 102 economists, among whom 78 expected that the interest rate would remain unchanged for the entire year of 2026; in July, the sample expanded to 104 people, with 78 still predicting no change for the year. However, at this short-term point during the July meeting, all 104 respondents expect the Federal Reserve to maintain the federal funds rate in the range of 3.50%-3.75% on July 29. The short-end rates remaining “unchanged” have evolved from a relatively dispersed judgment last month into a unanimous expectation at this key meeting point, establishing high rates as not just the current state but extending the baseline scenario throughout 2026 at the survey level.
This has significantly strengthened the narrative of “high rates for longer” in macro asset pricing: as the target range of the federal funds rate is the core benchmark for global dollar short-term rates and financing costs, it is assumed to stay at the high level of 3.50%-3.75% for an entire year, effectively anchoring risk-free dollar yields at a longer time dimension. This forces the market to reprice the path of dollar interest rates and raises the required risk premium on bonds, stocks, and crypto assets. Under this expectation framework, cash and short-term dollar assets gain a relative advantage due to more certain yields, while risk assets must compensate holders for the interest and volatility risks with a steeper future return curve. Under such a pathway assumption, crypto assets will operate under the constraints of a higher dollar interest rate risk premium.
How High Rates Change the Cost of Funds in Crypto
The federal funds rate, as the target range for interbank overnight borrowing rates, is essentially the core anchor of global dollar short-term rates and financing costs. The July 21 survey by Reuters shows that 104 economists unanimously expect the Federal Reserve to continue to maintain this rate in the range of 3.50%-3.75% during the July 29 meeting, with 78 expecting no adjustment for the full year of 2026, indicating that the benchmark rate for global dollar short-term funds will stay high for the visible future. High rates directly elevate the financing costs for banks and brokerages, making credit expansion more cautious; this cost transmits through secured financing, repurchase agreements, and off-exchange derivatives trading to the leverage on dollar-denominated assets. In the crypto market, dollar-denominated margin and lending funds are usually linked to offshore dollar rates and institutional financing costs. In a high-rate environment, the trading costs for leveraged long or short positions considerably increase the “interest expenses” incurred, thereby shrinking the net profit margin for pure price differential trading and high-frequency strategies.
On this basis, borrowing rates in both CeFi and DeFi will be repriced around the risk-free dollar rate. When the federal funds rate remains in the range of 3.50%-3.75% for a long time, the returns for risk-free or low-risk dollar assets (such as government bonds and money market funds) are collectively elevated, necessitating the on-chain dollar assets' yields to move upwards to maintain their appeal. CeFi lending platforms will price above this benchmark, while DeFi protocols will compete for the same pool of dollar funds by raising deposit rates; as a result, borrowing rates will rise in parallel, leading to a comprehensive increase in holding costs for leveraged positions. For arbitrage structures that rely on the advantage of funding costs—such as hedging transactions that utilize futures and spot price differentials—execution only generates value when the price differential exceeds the sum of the new risk-free yield and borrowing costs, forcing many marginal strategies to contract. Under this high-rate framework, dollar leverage in the crypto market becomes concentrated in a few high-conviction trades, while the overall leverage level and capital utilization are suppressed, making the pricing of BTC and ETH increasingly constrained by a trading structure of “limited leverage under high funding costs.”
Cooling Risk Appetite: BTC/ETH Under High Rate Pressure
After economists consolidated their consensus on “maintaining 3.50%-3.75% for the entire year of 2026,” the relative attractiveness of BTC and ETH, as assets that do not generate traditional interest or dividends, is systematically eroded. In the current environment, the yields of government bonds and money market funds are priced around this federal funds rate center, with the cost-performance ratio of risk-free or low-risk dollar assets significantly enhanced, standing in sharp contrast to the “zero interest, primarily relying on price appreciation” nature of BTC/ETH. For fund managers, holding BTC/ETH not only involves assuming price volatility risks but also entails sacrificing considerable and certain interest income, making asset allocation naturally inclined to reduce exposure to such high-volatility assets.
The notion of “higher rates lasting longer” also implies an increase in the discount rate, exerting pressure on the valuations of all assets that depend on forward stories and high growth expectations. Technology stocks and high beta risk assets often face valuation multiple compressions in such an environment. The long-term narrative of the crypto market (expansion of on-chain ecosystems, increase in application penetration, etc.) will also be discounted more rigorously, leading to lower current prices that funds are willing to pay. As a result, funds prefer assets and strategies with shorter durations and more visible cash flows: on-chain, capital retracts from unilateral long-term bulls and trend trading, turning instead toward range-bound swing operations, arbitrage, and options volatility trading, exchanging lower directional risk for more strategic returns closer to interest rate levels. Until the “high pressure” of interest rates materially eases, the trading structure of BTC and ETH resembles more of a risk budget game around high funding costs and high discount rates, rather than an unconstrained chase for forward growth stories.
Dollar Yield Curve and Repricing On-Chain Dollars
In the July 21 survey by Reuters, 104 economists uniformly expect the FOMC to continue locking the federal funds rate at 3.50%-3.75% on July 29, with 78 believing this level will remain unchanged for all of 2026, thus reinforcing the “high rates for longer” path once again. For the yield curve, the short-end is firmly anchored at high levels due to high rates, which pushes up the pricing center of dollar funds: from banks and brokerages to offshore dollar financing, all short-term instruments based on the federal funds rate will need to be repriced at higher levels of coupon and dividend yields, significantly enhancing the appeal of low-risk dollar products.
The yields of on-chain dollar assets are essentially linked to the off-chain dollar interest rate system. Whether it’s the lending pools for dollar-pegged tokens or various interest rate products priced in dollars, their pricing generally references the yields of US short-term government bonds, dollar deposits, and money market funds. When off-chain risk-free or low-risk instruments provide higher and more certain returns in a high rate environment, the yields for on-chain dollars must align with this reality: either raise borrowing rates and funding costs to retain liquidity, or accept a partial return of funds to traditional dollar product redistribution patterns. With expectations of high rates for the entirety of 2026 prevailing in the majority, the competition for rates in on-chain dollars will only intensify, with rising leverage costs and risk-free yields jointly compressing the relative attractiveness of BTC and ETH, making more funds reassess their rational balance between “locking in dollar returns” and “taking on on-chain price volatility risks.”
The Next Step for Traders: Waiting for the FOMC Decision
The survey released by Reuters on July 21 is merely the current consensus expectation and not a definitive conclusion: 104 economists uniformly expect the FOMC on July 29 to maintain the federal funds rate between 3.50%-3.75%, with 78 thinking it will not change for all of 2026. However, the Federal Reserve does not “endorse” this expectation and could completely disrupt the current consensus through interest rate decisions and communication biases. In the baseline scenario, if the meeting confirms “high rates remain unchanged for the year,” global assets will continue trading under the framework of high dollar short-end rates and thick risk-free returns, with crypto markets needing to accept sustained high leverage costs and the pricing environment competing against on-chain dollar asset yields, causing BTC and ETH to compete for swing and structural opportunities within much more limited risk budgets. Before July 29, the focus for traders is to compress leverage and tighten position structures around this consensus while awaiting the meeting's outcome; afterward, the immediate task will be to interpret the policy statement's signals regarding the future path of interest rates and the resulting changes in actual dollar yields, thus determining whether the high-rate framework is further reinforced or loosened, before deciding whether to continue with a defensive dollar yield allocation or to reinvest in BTC and ETH with a higher risk exposure.
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