The Fed signals a "hawkish" pivot: how cutting meetings will hit bitcoin
The minutes of the latest Federal Open Market Committee (FOMC) meeting have revealed a troubling trend for the crypto industry. While the market is accustomed to the standard cycle of eight meetings per year, Fed Governor Kevin Warsh is pushing a radical idea — reducing that number to six. At first glance, this is a technical detail, but for bitcoin (BTC), it could result in a significant increase in volatility and pressure.
Hawks Gain Traction
The July 29 decision to hold rates at 3.50–3.75% was passed by a majority (9 to 3), but the divide within the committee turned out to be deeper than it seemed. Three members — Beth Hammack, Neel Kashkari, and Lori Logan — voted for an immediate 25-basis-point hike. These "hawks" consistently demand a more aggressive fight against inflation, which stood at 3.7% in June — nearly double the 2% target level.
The remaining participants did not rule out future tightening if inflationary pressures do not ease. Additional risk factors cited include the prolonged conflict in the Middle East, which keeps producer costs elevated, as well as the exhaustion of the effect from previously imposed tariffs. Even the artificial intelligence boom is sparking debate: some see it as a pro-inflationary factor, while others view it as a future tool for lowering prices.
Fewer Meetings — More Uncertainty
Warsh's initiative is simple: six meetings per year would give the regulator more time to analyze economic data. However, for the market, this means fewer reference points and more room for speculation. The less frequent the decisions, the harder it is to forecast the rate trajectory, and each new verdict could trigger sharper spikes in volatility.
This is particularly sensitive for bitcoin, which historically trades in direct correlation with expectations regarding monetary policy. The Fed has already adopted a more hawkish tone, and the Treasury bond market reacted instantly: long-term yields soared to highs not seen since 2007. In such conditions, investors prefer safe instruments with guaranteed returns over risky assets like BTC.
Notably, after the minutes were released, bitcoin rose 5.3% to $68,245, but this bounce looks more corrective than reversal-like. Traders are already pricing in a 30% probability of a rate hike, and for the September 15–16 meeting, they are pricing in another 25-basis-point move.
My take: Reducing the number of meetings is not just a bureaucratic reform but a signal that the Fed is preparing for a prolonged period of tight policy. For bitcoin, this means the "bullish" scenario is postponed until inflation shows sustained decline. Investors should prepare for prolonged consolidation and heightened sensitivity to every macroeconomic report.