FOMC Minutes Released – Fed Divided, Confusion on Rate Cuts
The Federal Reserve released its January meeting minutes yesterday. These minutes show that there is a big division among Fed officials. Everyone had voted to keep interest rates steady at 3.50% to 3.75%. But the minutes reveal three different groups inside the Fed. Some officials still want to cut rates if inflation keeps falling. Some want to keep rates where they are for a longer time. And surprisingly, some officials even talked about raising rates again if inflation stays too high.
Crypto market has reacted negatively to this news. Bitcoin has fallen below 677and is facing strong resistance near 70k. The reason is simple. When the Fed sounds hawkish, meaning it wants to keep rates high, the dollar becomes stronger. Investors then pull money out of risky assets like crypto. Analysts say Bitcoin is now trading in a range between 666 and 72k. If selling continues, the next major support level could be 55k. Until there is clarity on rate cuts, crypto prices will remain under pressure.
Gold's reaction has been mixed. After the minutes, gold fell slightly by 0.4% to around 4.9k per ounce. This happened because the dollar became stronger. But the situation for gold is not simple. On one side, high rates are bad for gold because it gives no interest. On the other side, geopolitical tensions and worries about Fed's independence are supporting gold prices. Gold had reached an all-time high above 5.5k in January. Many banks still believe gold will go up again later this year. For now, gold is stuck between these two opposite forces.
Markets expect the first rate cut to happen in June, with maybe three cuts total this year. But this can change quickly depending on new inflation and jobs data. The most important PCE inflation report will come this Friday. For both crypto and gold investors, the message is clear. Volatility will continue until the Fed's path becomes clearer. The days of easy money are over. Now everything depends on economic data.
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