The Federal Reserve (Fed) released the minutes of its June 16–17 meeting. The document, published on July 8, revealed deep divisions within the Federal Open Market Committee (FOMC). Although all 12 voting members unanimously supported keeping the rate at 3.50–3.75%, a serious debate about the future course of monetary policy lies beneath this apparent consensus.
A "Family Feud" at the Fed
Several meeting participants advocated for an immediate rate hike, but ultimately agreed on the need for a pause. The key factor dividing opinions was the outlook for inflation. Nine of the 19 officials now expect at least one rate hike by the end of 2026. Notably, such forecasts were not made at all until recently. Fed Chair Kevin Warsh, for whom this was his first meeting in the role, refrained from a public forecast but described the discussions at the press conference as a "real family feud," which, he said, led to the right outcome.
Artificial Intelligence as a New Inflation Factor
Fed experts raised inflation expectations for 2026 and 2027. The main drivers are tariff increases, disruptions in energy supply from the Middle East, and, crucially, a sharp rise in investments in AI infrastructure. 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 spending on artificial intelligence could lower costs in the long term 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 up.
Bitcoin's Reaction: Correction Amid Hawkish Rhetoric
The cryptocurrency market reacted instantly to the publication of the minutes. At the time of writing, Bitcoin (BTC) is trading around $62,240, losing approximately 2.7% over the past day. The decline occurred amid high activity in the options market: shortly before the release, investors were betting on a rise after BTC bounced to $64,000, supported by positive ETF inflows. However, the hawkish tone of the minutes dashed these expectations, demonstrating the continued sensitivity of the crypto market to macroeconomic signals.
Analysts note that the correlation between traditional markets and cryptocurrencies is becoming increasingly close. The dynamics of oil, government bond yields, and the dollar exchange rate had already reflected a shift in market expectations toward prolonged inflation, and the Fed minutes merely confirmed this trend.
Outlook: What Awaits the Market?
The next FOMC meeting is scheduled for July 28–29. Inflation remains above target, and nine committee members lean toward tightening policy. New data on inflation and the labor market will be decisive in determining whether the dispute within the Fed continues with an actual rate hike or whether the committee takes a pause. For Bitcoin, this means sustained high volatility in the coming weeks.
Expert Comment: The market is once again realizing that the era of "cheap money" is definitively over. The Fed appears ready to sacrifice economic growth rates to fight inflation, and this is a bearish signal for all risk assets, including cryptocurrencies. Investors should prepare for a scenario where rates remain high for longer than anticipated.