One of the main reasons for the fluctuation in Bitcoin price today was the Fed minutes that were just released. Barkin made unsettling statements today, and it would have been frustrating if the Fed minutes included details such as new interest rate hikes being on the table. Now that the minutes have been disclosed, what awaits cryptocurrencies?
Fed Meeting Minutes
The Fed minutes, which have caused volatility for cryptocurrencies many times before, did the same again. Just minutes before the release, the BTC price retreated to the $42,000 region. Investors now believe that action must be taken without further delay on interest rate cuts. However, market expectations have dropped slightly below a 150bp cut for this year. Powell, in his last statement, mentioned a 75bp cut.
Meeting minutes details:
- Fed minutes were released.
- The Fed’s economic outlook largely resembled the projection prepared for the previous meeting.
- Participants observed that progress on inflation was uneven among components, noting that core service prices were still rising at a high rate.
- Several participants suggested that the FOMC might face a trade-off between its dual mandate objectives in the coming period. These participants pointed to downside risks to the economy associated with an overly restrictive stance.
- FOMC members generally viewed any addition to comments about possible further tightening as conveying their judgment that interest rates were likely at or near the peak of the cycle.
- Some participants highlighted the uncertainty about how long the restrictive policy should be maintained.
- Many participants indicated that it would be appropriate to begin discussing technical factors related to slowing balance sheet reduction well before such a decision was made.
- Participants generally affirmed that it would be appropriate for policy to remain restrictive until inflation is sustainably reduced. Participants generally emphasized the importance of maintaining a cautious and data-dependent approach.
- Projections indicated that nearly all participants implied that a lower federal funds rate would be appropriate by the end of 2024.
- Several participants observed that conditions might require keeping the policy rate at its current level for longer than they currently anticipate.
- Participants noted that the outlooks are associated with unusually high uncertainty.
