Bitcoin Market Focuses on Fed’s Next Move: FOMC Minutes Released!

  • Federal Reserve officials emphasized in their latest meetings that they would not rush to lower interest rates and expressed both optimism and caution regarding inflation.
  • The meeting summary conveyed a general sense of optimism about the success of the Fed’s policy moves in lowering the inflation rate.
  • A series of reports before the meeting indicated that inflation, although still high, had returned to the Fed’s 2 percent target.

While the Bitcoin market focuses on how the Fed will continue its policies, the FOMC minutes were released today: All the details!

FOMC Minutes Released Today

fed-bitcoin

Federal Reserve officials stated that they would not rush to lower interest rates in their latest meetings and expressed both optimism and caution about inflation. According to the minutes released on Wednesday, policymakers not only decided not to change the key overnight borrowing rates but also altered the post-meeting statement, indicating that there would be no cuts until the Federal Open Market Committee gains “greater confidence” that inflation is receding.

The meeting summary showed a general sense of optimism that the Fed’s policy moves have been successful in lowering the inflation rate, which reached the highest level in over 40 years in mid-2022. However, officials mentioned the need to see more before easing policy and expressed the possibility of interest rate hikes.

“While discussing the policy outlook, participants assessed that the policy rate was likely near its peak for this tightening cycle,” the minutes stated. “However, participants generally indicated that they did not think it would be appropriate to lower the target range for the federal funds rate until they had greater confidence that inflation had retreated sustainably toward its 2 percent objective.”

A series of reports before the meeting showed that inflation, while still high, had returned to the Fed’s 2 percent target. The minutes acknowledged “solid progress,” but the committee saw some of the progress as “idiosyncratic” and likely tied to nonrecurring factors.

As a result, members emphasized that they would “carefully assess incoming data” to evaluate where inflation is headed in the long term, and they acknowledged both upside and downside risks, expressing concerns about lowering interest rates too quickly.

“Participants highlighted the uncertainty associated with the duration of the restrictive monetary policy stance,” the minutes said. “Most participants noted the risks associated with moving too quickly to ease the policy stance and underscored the importance of carefully assessing incoming data when evaluating whether inflation had retreated sustainably to 2 percent.”

“Reserves are at an Adequate Level”

The minutes noted that a more in-depth discussion would take place at the March meeting. Policymakers also mentioned the possibility of adopting a slow approach in a process called “quantitative tightening” during the January meeting. The relevant question is how high their reserves should be to meet reserve needs. The Fed defines the current level as “adequate.”

“According to the minutes, a group of participants noted that slowing the pace could correct the transition to this level of reserves when considering the uncertainty associated with estimates,” it said. “They also noted that the Committee could continue its balance sheet normalization process even after starting to lower the federal funds rate target range.”

Given the belief that current policy is tightening, a major question going forward for Fed officials will be how much easing will be needed to support growth and control inflation while still considering concerns about the economy growing too quickly.

There is still concern about growth being too rapid. The Consumer Price Index rose 3.1 percent year-over-year in January—excluding food and energy, there was a 3.9 percent increase. The “sticky CPI,” an indicator that tracks less-volatile housing and other prices, increased by 4.6 percent according to the Atlanta Fed. Producer prices rose 0.3 percent monthly, well above Wall Street expectations.

In a “60 Minutes” interview aired just a few days after the FOMC meeting, Chairman Jerome Powell said, “When the economy is this strong, we feel we should be thinking about when we might start raising interest rates. I’m looking for more evidence that it’s sustainably getting down to 2 percent.”

Since then, markets have had to readjust their expectations for interest rate cuts. Traders in the Fed funds futures market had priced in almost certain cuts for March, but this has been postponed until June. The expected amount of interest rate cuts for the year has been reduced from six to four. FOMC members had predicted three interest rate cuts in December.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Bitcoin BTC’s Roller Coaster: Plunge and Surge Amid Halving Event and Market Volatility

Explore the dramatic shifts in Bitcoin's price as it navigates through halving aftermath and potential market recoveries.

Exploring Blockchain’s Future: Insights from Gateio’s VC & Web3 Ecosystem Party at TOKEN2049

Join industry leaders from Gate.io and Huawei Cloud as they delve into the future of blockchain and Web3 technologies, following a successful gathering at TOKEN2049 in Dubai.

Bitcoin BTC’s Post-Halving Era Begins: Dominance Stabilizes as Altcoins Rally

Explore the evolving dynamics of the cryptocurrency market following Bitcoin's latest halving, which could set the stage for altcoin success.

Bitcoin Fees Skyrocket, Surpassing Ethereum – Could Ordinals Boost BTC Security?

Discover how Bitcoin fees have soared, the role of Ordinals in this trend, and the potential implications for Bitcoin's security model.

Bitcoin Halving Sparks Market Volatility: Demand Surge Meets Miner Challenges

Discover the key factors driving Bitcoin's trajectory after the halving. Get expert insights into the potential for a supply shock, the role of ETFs, and the challenges faced by miners.
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Litecoin Could Be Preparing for a 20% Rise! Current LTC Analysis

Will Litecoin continue its upward trend? What should LTC investors expect? What are the targets in the current LTC analysis?

Ethereum Might Be Preparing for a Rise! Current ETH Analysis

Ethereum's daily chart has sustained a rise up to $3100 after strong buying in the $2867 - $2950 range. Current ETH Analysis

NEO Launches Uptrend to $25! Current NEO Analysis

Analyzed NEO's 3-hour chart, showing upward trend post $14.80 resistance breakthrough, eyeing $15.18 resistance; potential long positions suggested at $14.636 - $14.448 support range with a stop loss at $13.90, as NEO aims for $25 target amidst over 5% gains.

Is Litecoin Ready to Launch its Rise to $140? Current LTC Analysis

When examining LTC's technical chart, a downward trend is observed in recent days. The nearest support is at the level of 91.86 dollars. The support range between 97.61$ and 99.07$ on the 4-hour chart is significant. For long positions, the support range of 92.41$ - 91.07$ can be expected.

Bitcoin (BTC) Surges Past $70k: Could a Rally to $75k be Next?

Get expert analysis on Bitcoin's breakout above $70,000. Discover what's driving the price action, key levels to watch, and potential scenarios for BTC's near-term future.
Lucien Renard
Lucien Renardhttps://en.coinotag.com/
Lucien Renard is a 24-year-old writer specializing in cryptocurrency analysis and price action. With a focus on technical analysis, Lucien provides valuable insights into market trends and potential opportunities for investors.
spot_imgspot_imgspot_imgspot_img

Bitcoin BTC’s Roller Coaster: Plunge and Surge Amid Halving Event and Market Volatility

Explore the dramatic shifts in Bitcoin's price as it navigates through halving aftermath and potential market recoveries.

Exploring Blockchain’s Future: Insights from Gateio’s VC & Web3 Ecosystem Party at TOKEN2049

Join industry leaders from Gate.io and Huawei Cloud as they delve into the future of blockchain and Web3 technologies, following a successful gathering at TOKEN2049 in Dubai.

Bitcoin BTC’s Post-Halving Era Begins: Dominance Stabilizes as Altcoins Rally

Explore the evolving dynamics of the cryptocurrency market following Bitcoin's latest halving, which could set the stage for altcoin success.