FOMC Minutes Reveal Fed Officials Advocate Interest Rate Hike
Summary: The FOMC meeting minutes reveal that most Fed officials support maintaining current interest rates, with some predicting a 25 basis point rise. The Federal Reserve is cautioning about interest rate decisions, which may benefit riskier assets like cryptocurrencies at the expense of stock markets.
Minutes from a Federal Open Market Committee (FOMC) meeting held in June 2023 were recently made public, revealing that a majority of Fed officials advocated maintaining the status quo with rates at their present level, while some favored a 25 basis point (bps) rise. Last month the Fed paused the hike, but it wont be likely the case henceforth.
More Hikes Expected
In contrast to market expectations of potential rate reduction before year’s end, practically all Fed members are optimistic about the outlook for the rest of 2023 and predict more rate rises.
Crypto Market to Benefit
Meanwhile, the cryptocurrency market reacted positively to the FOMC minutes’ publication, with Bitcoin’s price posting a jump. Bitcoin is now trading at $30,503 and is up 1% in the last 24 hours. Bitcoin’s price has been fluctuating wildly in recent Fed policymakers noted that core inflation has not shown any evidence of persistent improvement since the start of 2023.
Therefore, the report suggested that further data on the economy’s condition would be necessary before making any more decisions on the central bank’s monetary policy. In general, the Federal Reserve continues to transmit a message of caution about interest rate decisions, which benefits riskier assets such as cryptocurrencies at the expense of the stock markets.
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Fed Chair Jerome Powell issued a stern warning after the June FOMC meeting, saying that the panel’s estimates indicated a tightening of 0.5 percentage points higher in interest rates in 2023.
According to the minutes, everyone at the June meeting felt it was reasonable to keep interest rates where they were at present. The Fed policymakers stated that the economy has likely not yet seen the full consequences of monetary tightening. There was agreement that the previous actions were reasonable, and that the rate of tightening was acceptable.