FOMC meeting minutes hit hard: Fed's high inflation concerns suppress September rate cut expectations, Bitcoin price rebounds after a huge shock.

This article provides an in-depth analysis of the latest Fed FOMC meeting minutes, revealing how its core stance of "inflation risk outweighs employment risk" has led to a decrease in the probability of an interest rate cut in September. It analyzes the linkage between macroeconomic policy and the Crypto Assets market, with a focus on the immediate response of Bitcoin prices to changes in interest rate expectations, and provides a forward-looking analysis of future remarks from Fed Chair Powell.

Fed's Shift in Stance: Inflation Risks Take Priority, Labor Market Risks Take a Backseat

The latest FOMC meeting minutes highlight that the Fed currently views inflation risk as a more serious threat than the risk of a weak labor market. This stance has led to a decline in market expectations for a rate cut by the Fed in September, although Chairman Jerome Powell is preparing to speak at the Jackson Hole annual meeting on August 22. According to the minutes of the July FOMC meeting, most participants judged that the upside risks to inflation outweigh the downside risks to employment. Meanwhile, several other members believed that the two risks are balanced, while a few members thought that the downside risks to employment are greater. As CoinGape reported earlier, participants in the Crypto Assets market were looking forward to insights from the FOMC meeting minutes regarding the Fed's next steps and whether they would make a decision to cut interest rates in September. However, based on the meeting minutes, the interest rate cut remains undecided, as the committee is more concerned about inflation rather than a weak labor market. It is worth noting that inflation seems to be on the rise, with the US July PPI (Producer Price Index) increasing by 3.3% year-on-year. On the other hand, the labor market also shows signs of weakness, with non-farm payrolls increasing by 73,000 in July, far below the expected 147,000. Therefore, the Fed is currently at a crossroads: whether to maintain interest rates steady due to concerns about inflation or to lower rates because of a weak labor market. The FOMC minutes indicate that the committee is likely to choose the former. It is worth noting that many participants pointed out that the full impact of Trump's tariffs may take some time to materialize. They commented that tariff-related factors could lead to "inflation stubbornly remaining high," which may make it difficult to distinguish between tariff-related price increases and changes in underlying trend inflation.

The probability of interest rate cuts in September has decreased, and market expectations have been slightly adjusted.

The CME FedWatch tool data shows that after the release of the FOMC meeting minutes, the market's expectation for a 25 basis point rate cut in September slightly decreased to 82.9%, down from about 85%.

Bitcoin price rapidly recovers after sharp fluctuations, market focuses on Powell's speech

Meanwhile, the price of Bitcoin plummeted to around $113,300 after the release of the meeting minutes. However, this flagship Crypto Asset quickly recovered along with the entire Crypto Assets market, and BTC once again broke through the $114,000 barrier. Now, participants in the crypto assets market will turn their attention to Jerome Powell's speech on August 22 at the Jackson Hole annual meeting to observe whether the Fed chairman currently holds a hawkish or dovish stance. His speech may also reveal whether the Fed's top priority remains fighting inflation after the release of both the PPI data and employment data. It is worth noting that both pieces of data were published after the Fed decided to maintain interest rates at its meeting on July 30.

Conclusion: The interconnection between macro policies and the crypto market is strengthening; patience and insight are key to investment.

The FOMC meeting minutes unexpectedly conveyed a hawkish tone, once again clarifying that the Fed's policy balance is tilted towards curbing inflation. This directly extinguished the market's fervent expectations for a significant rate cut in September and triggered a short-term sharp fluctuation in Bitcoin prices. However, the rapid recovery of the market also demonstrated its resilience. For crypto assets investors, closely tracking the Fed's interest rate decision path, interpreting key economic data, and gaining insights into its deep connections with market liquidity are more important than ever in the current cycle of high macroeconomic uncertainty. All eyes are now on Jackson Hole, waiting for Powell to provide clearer signals.