FOMC meeting minutes released – what to expect from Bitcoin?

YEREVAN (CoinChapter.com) – The Federal Open Market Committee (FOMC) released its Feb 1 meeting minutes on Feb 22, as the markets anticipated more details on the Fed’s upcoming policy. The minutes confirmed more interest rate hikes ahead, intensifying recession fears.

FOMC meeting minutes data released

In detail, according to the latest CPI data, core inflation stood at 6.4% in January. Officials at the FOMC meeting generally agreed that the hawkish policies will continue “unless inflation is on a sustained downward path to 2%.” However, the latest meeting minutes showed that the solid majority of Federal Reserve officials agreed to slow the pace of interest rate increases to a quarter of a percentage point.

FOMC meeting participants also concurred that the agency had made “significant progress over the past year” in moving toward a “sufficiently restrictive stance” of monetary policy.

Even so, participants agreed that, while there were signs that the cumulative effect of the Committee’s tightening of the stance of monetary policy had begun to moderate inflationary pressures, inflation remained well above the Committee’s longer-run goal of 2% and the labor market remained very tight.

stated the minutes.

The remark above intensified bearish expectations and showed Fed officials are still attuned to the inflation risks. A hawkish tilt may come into a more precise view when policymakers issue new interest rates and economic projections at a meeting in March.

What to expect in the current quarter?

Greg McBride, the Senior Vice President & Chief Financial Analyst at Bankrate, told CoinChapter that he expected more hawkish policies to come, according to “recent comments from 2 FOMC members about having favored a larger 50bp hike at the February meeting.”

Though the minutes won’t reveal explicit plans on how many more Fed hikes the members see as necessary, we may get a sense from the deliberations as to what to expect when the Fed releases their Summary of Economic Projections at next month’s meeting.

said McBride.

Also read: Initial Jobless Claims Decline Week Over Week — Is Recession at Bay?

Dr. Ernie Goss, a professor at Creighton University, also told CoinChapter that he would dismiss further inflation fears just yet. Moreover, he underscored the lack of unanimity among FOMC members on the issue, which is evident in the meeting minutes, but not in the votes.

Goss asserted that “the hawkish members, who see inflationary pressures waning, but not fast enough, are pushing for more aggressive steps to reign in inflation and inflation expectations.”

While the 25 basis point rate hike in February was approved by all voting members of the FOMC, there was more dissension in remarks by hawks such as St. Louis Fed president James Bullard. Even former doves, such as Neel Kashkari, president of the Minneapolis Federal Reserve, are voicing concerns about inflation and inflation expectations.

he noted.

Meanwhile, due to Bitcoin’s heightened correlation with the risk-on sector, the FOMC meeting minutes are likely to affect the crypto sector as well.

Will Bitcoin slide?

Bitcoin’s response to the previous year’s FOMC meeting minutes has mostly been consistent with the delivered sentiment. In H1,2022, the Fed implemented several rounds of 50 bps interest rate hikes, and the Bitcoin charts printed subsequent red candles after each meeting minutes release, as seen on the chart below.

Notably, the Fed generally announces the intended interest rate policies right after each meeting. However, the release of the meeting minutes gives more insight into the general consensus among FOMC officials and more details on the policies.

The chart above also shows that the previous three FOMC meeting minutes’ release dates did not have much effect on the BTC chart. The more dovish approach in Q4 2022 could be the reason behind the indifference. So, what affect will the latest FOMC meeting minutes have?

If the past is any indication, the upcoming 25bps interest rate hikes are not likely to cause a BTC price avalanche. However, a confident rally looks equally unlikely. A stall below the $30,000 ceiling could be the best hope for BTC bulls in the present quarter.

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