The latest Federal Reserve meeting minutes have released a significant signal! Is a rate cut in September hanging in the balance?
In the early hours of today, the Federal Reserve released the minutes from the July monetary policy meeting, resulting in a market shock! Most committee members clearly stated that inflation risks have outweighed concerns about the employment market, which means that the Federal Reserve's pace of rate cuts may be more cautious than expected.
Key interpretations of the meeting minutes:
1. Rare internal dissent: In the July meeting, Federal Reserve governors Waller and Bowman voted against, marking the first time since 1993 that two governors opposed simultaneously. They believe the employment market is weakening, but most committee members still see greater inflationary risks.
2. Tariffs exacerbate inflation concerns: Committee members specifically emphasized that the tariff policy of the Trump administration could lead to inflation remaining above 2% for an extended period, increasing the risk of inflation expectations becoming unanchored. This means that the Federal Reserve may maintain high interest rates for a longer time to combat inflation.
3. Probability of a September rate cut decreases: After the minutes were released, the market's expectation for a rate cut in September has dropped from over 90% to below 80%. Investors are beginning to reassess the Federal Reserve's monetary policy path.
Powell's speech becomes the market focus:
All eyes are now focused on Federal Reserve Chairman Powell's speech this Friday at the Jackson Hole Global Central Bank Symposium. This will also be his last speech at this symposium during his tenure.
The market hopes to find the following key signals from Powell's speech:
- Will rate cuts be initiated in September?
- What is the Federal Reserve's plan for future interest rate paths?
- How to balance inflation risks with employment market concerns?
Historical experience shows that Powell has previously released clear information in such occasions, such as emphasizing the balance of dual risks in 2018 and expressing determination to combat inflation in 2022. His speech this time may reshape the Federal Reserve's policy blueprint.
What will be the impact on the cryptocurrency market?
1. Short-term pressure: The Federal Reserve's hawkish stance usually leads to pressure on risk assets, and cryptocurrencies are no exception. If interest rates remain high for an extended period, high-valued assets (including some cryptocurrencies) may face pressure.
2. Liquidity expectations are key: Although there is a short-term hawkish bias, the market still expects the Federal Reserve to eventually pivot to rate cuts. Once the rate cuts begin, the vast off-market funds (with U.S. money market funds holding $7.2 trillion in cash) may flood into risk assets, including cryptocurrencies.
3. Altcoin season may be delayed but not absent: Institutions like Coinbase believe that expectations for a Federal Reserve rate cut remain a key factor driving altcoin seasons. Although the meeting minutes are hawkish, if Powell's speech on Friday is not so tough, September may still bring an altcoin market.
How should investors respond?
Short-term: Remain cautious, pay attention to the wording of Powell's speech on Friday, and avoid high-leverage operations.
Medium-term: Focus on inflation data and employment market performance, as these will be key factors influencing Federal Reserve decisions.
Long-term: Accumulate quality assets at low points; a shift in Federal Reserve policy is just a matter of time, and once liquidity is released, the cryptocurrency market is expected to benefit.
Summary:
The Federal Reserve meeting minutes indicate that combating inflation remains the top priority. The market needs to adjust its expectations regarding the pace of rate cuts, but that does not mean a loosening cycle won't come.
Remember: In the cryptocurrency market, the biggest profits often come from the panic of others. When the next panic arrives, will you choose to follow or to position against the trend?#美联储7月会议纪要 