On July 8, the Federal Reserve published the minutes of its June 16–17 meeting, which was the first for new Chairman Kevin Warsh. The decision to keep the rate at 3.50–3.75% was unanimously approved by all 12 voting committee members, but serious disagreements lie beneath the surface of unity.
Hawks Gain Ground
The minutes clearly reveal a split: several meeting participants insisted on the need for a rate hike as early as June, but ultimately agreed to a pause. The main reasons for concern are persistent inflationary risks driven by rising tariffs, higher energy costs in the Middle East, and explosive demand for technology, data centers, and electricity from artificial intelligence.
Key signal: 9 out of 19 Fed officials now expect at least one rate hike by the end of 2026. Not long ago, such forecasts were entirely absent. Warsh himself described the discussion at the press conference as a "real family squabble," emphasizing that the final decision was inevitable, but the path to it was thorny.
AI Accelerates Inflation
Fed experts have revised their inflation expectations for 2026–2027 upward. In April, core inflation stood at 3.3%, in May around 3.4%, significantly above the 2% target. Key drivers include massive investments in AI infrastructure. Some meeting participants believe that over time, AI will reduce costs through productivity gains, but this effect will only materialize in a few years. For now, demand for data centers and high-tech equipment continues to push prices higher.
Bitcoin Under Pressure
The market reacted immediately. At the time of writing, bitcoin is trading around $62,240, losing approximately 2.7% in the past 24 hours. The decline occurred amid active options trading: before the minutes were released, investors were betting on a rise, following a bounce to $64,000 thanks to ETF inflows. However, the Fed's hawkish tone and rate uncertainty triggered profit-taking.
Analysts emphasize that the crypto market now reacts directly to oil, bond yields, the dollar exchange rate, and interest rates. Macroeconomics is increasingly influencing crypto, and the Fed minutes confirmed this. The next FOMC meeting is scheduled for July 28–29. Fresh data on inflation and the labor market will be decisive: either the "family conflict" within the Fed will end with a rate hike, or we will see another pause.
My comment: The market is clearly underestimating the likelihood of tightening. If we see another strong employment and inflation report in July, the rate could be raised sooner than most expect. For bitcoin, this means increased volatility and the risk of testing the $60,000 level in the short term.