The Federal Open Market Committee (FOMC) meeting minutes released on Wednesday exposed serious divisions within the Fed. While the majority preferred to keep the rate unchanged, three influential committee members advocated for an immediate hike. For Bitcoin, this is a signal that monetary policy may remain tight for longer than expected.
On July 29, the Fed left the key rate in the 3.50–3.75% range, but the 9-to-3 vote was far from unanimous. Now that the full text of the minutes is available, the picture has become clearer: Beth Hammack, Neel Kashkari, and Lorie Logan, known for their hawkish stance, insisted on a quarter-point hike to combat inflation.
Inflation is not retreating, and the Fed is ready to act
The majority of committee members preferred a wait-and-see approach, but many of them directly stated that a move would be necessary if inflationary pressures do not ease. The Fed's inflation gauge—3.7% in June—still significantly exceeds the 2% target. This creates a fundamental basis for further tightening.
Beyond inflation, committee members discussed other risks as well. Geopolitical tensions in the Middle East could keep producer costs elevated for a long time, adding further pressure on prices. At the same time, the effect of past trade tariffs is estimated to be largely exhausted.
A separate topic of discussion was the rapid development of artificial intelligence. Some meeting participants believe that growing interest in AI is already driving up prices, while others expect that the technology will, on the contrary, reduce costs and help contain inflation in the future.
Warsh's reform: fewer meetings—more uncertainty
Special attention deserves Chairman Kevin Warsh's initiative to reduce the number of meetings to six per year. Although a final decision has not yet been made and the 2026 schedule remains in effect, the issue has already been officially put up for discussion. This fits into Warsh's overall course of reducing communication: he has already shortened statements and abandoned hints about future steps.
For the market, this means fewer reasons for speculation, but at the same time higher volatility at decision points. A silent Fed is harder to predict, and sporadic decisions could cause sharp spikes.
Bitcoin under pressure
The market has already reacted to the hawkish signals. In July, traders estimated the probability of a rate hike at one-third, and for September, an additional increase of 0.25 percentage points was priced in. Elevated rates have already impacted dynamics: this year, Bitcoin is lagging behind gold, as 5% Treasury yields pull capital into safer instruments.
After the release of the minutes, Bitcoin traded at $68,245, showing a daily gain of 5.3%. However, the hawkish rhetoric immediately intensified pressure on the leading cryptocurrency. The next major test is the September 15–16 meeting, when it will become clear whether the "hawks" will strengthen their position or achieve a rate hike.
My view: the market still underestimates the Fed's readiness to tighten. Three "no" votes are not an anomaly but a signal of growing consensus within the committee. If inflation does not show sustained declines by September, the likelihood of a rate hike will increase significantly, and Bitcoin, as the riskiest asset, will be among the first to suffer from a repricing of expectations.