Federal Reserve Chair Kevin Warsh has said that he is prepared to raise interest rates in September if inflation is higher than anticipated. Let’s discuss why inflation could rise for July 2026, and how it may impact the cryptocurrency market via higher interest rates.

Why Inflation May Rise, And Higher Interest Rates May Hit The Cryptocurrency Market

Cryptocurrencies and other high-risk assets often take a high when interest rates go up. This is because higher interest rates make borrowing difficult. Such a scenario makes investors move their funds to safer bets, such as gold and other safe havens. Interest rates are directly tied to inflation. Inflation in the US is well above the Federal Reserve’s 2% target. High inflation has kept the Fed from lower rates so far this year, despite President Trump’s repeated requests. The cryptocurrency market has also underperformed as a result.

Inflation in the US has been going down over the last few months, falling to 3.5% in June 2026. The cryptocurrency market, however, has yet to see positive price action. The Federal Reserve expects July inflation numbers to further dip to 3.32%.

Although inflation has been going down in the last few months, the re-escalation in the US-Iran conflict led to a spike in oil prices last month. Higher oil prices often leads to higher CPI (Consumer Price Index) figures. To add fuel to fire, President Trump’s recent tariff spree may also play a major hand in driving up inflation figures. This could push July’s numbers higher. Such a move could spell trouble for the cryptocurrency market.

Also Read: President Trump Could Be Forced To Sell His Cryptocurrency

Additionally, the Core Personal Consumption Expenditures (PCE), one of the FOMC’s (Federal Open Market Committee) favorite tools to determine inflation, paints a similar story. Core PCE inflation in June came in at 3.33%, and the data shows that it could rise to 3.36% in July.