The Federal Reserve published the minutes of its June 16–17 meeting, and this document has become a litmus test for financial markets. Although all 12 voting committee members unanimously voted on July 8 to keep the rate at 3.50–3.75%, tensions within the FOMC are clearly escalating.
A "Family Feud" Over Rates
The key takeaway from the minutes is the lack of consensus. Several meeting participants openly stated that June data warranted a rate hike, yet they still supported a pause. Moreover, 9 out of 19 officials expect at least one rate hike by the end of 2026. This is a sharp shift from previous forecasts, where there were no votes for tightening at all.
Fed Chair Kevin Warsh himself described the discussions as a "real family feud" during the press conference, adding, "In the end, we got to where we needed to be." However, his personal rate forecast was not provided, adding to the uncertainty.
AI Boom and Geopolitics Fuel Inflation
The main drivers behind the revision of inflation expectations for 2026–2027 are rising tariffs, supply disruptions from Middle Eastern countries, and, crucially, a sharp surge in investments in AI infrastructure. Demand for data centers, high-tech equipment, and electricity driven by the development of artificial intelligence continues to push prices upward.
Core inflation stood at 3.3% in April and around 3.4% in May, significantly above the Fed's 2% target. Some committee members believe that AI could eventually reduce costs through productivity gains, but this effect is expected only in a few years.
Bitcoin Under Pressure: Market Reaction
At the time of writing this analysis, Bitcoin (BTC) is trading around $62,240, down approximately 2.7% over the past 24 hours. The decline occurred against the backdrop of the minutes' release, where the key source of uncertainty was the lack of a clear rate forecast from Warsh.
Notably, shortly before the document's release, investors were actively betting on a rally, following BTC's rebound to $64,000 on positive ETF flows. This dynamic underscores the crypto market's high sensitivity to rate expectations. The scenario mirrors the situation that unfolded during the dispute over the Fed's independence involving Lisa Cook.
Analysts note a strengthening correlation between macroeconomics and cryptocurrencies. Ryan Kerklie, CEO of Global Settlement Network, emphasized: "The crypto market now reacts to oil, interest rates, the dollar, and bond yields. Macroeconomics directly impacts crypto."
Outlook: What's Next?
The next FOMC meeting will take place on July 28–29. Inflation remains above target, and nine committee members lean toward tightening policy. New inflation and labor market data will be decisive in determining whether the internal Fed dispute results in a rate hike or a pause.
My comment: The market is clearly pricing in a "higher for longer" scenario, and Bitcoin is no exception. Until the Fed provides a clear signal about rate cuts, BTC will remain a hostage to macroeconomic uncertainty. AI-driven inflation is a new, underestimated factor that could force regulators to act more aggressively than expected.