💥 The Fed's minutes reveal a rate cut in December on the edge, Bitcoin falls below
The recently released minutes of the Federal Reserve from the meeting on October 28 to 29 have thrown new uncertainty on the policy outlook for December, sharpening market volatility in stocks, bonds, and Bitcoin.
Although the minutes reflect economic data only available at the time of the meeting, the change in language within the document has become the latest focal point for analysts dissecting the Fed's next move.
The Fed described 'many' officials as viewing a rate cut in December as 'probably not appropriate,' while 'several' said a cut 'could be appropriate.'
In the language of Fed watchers, hierarchy matters. 'Some' > 'several', and 'many' surpasses both. This indicates that a narrow majority opposed cutting rates in December at the time of the meeting.
The minutes also indicated emerging stress points in money markets:
‼️Volatility in the repo,
‼️Decrease in ON RRP usage, and
‼️Reserves moving towards scarcity.
This combination historically preceded the end of quantitative tightening (QT). Therefore, the sentiment is that the Fed could be closer than expected to ending balance sheet reduction.
Before this release, markets had already deleveraged, with the price of Bitcoin falling below 89,000 dollars to a 7-month low. The sentiment spread to crypto stocks and TradFi indices.
Macro traders say the true story is the extremely tight nature of the Fed's division. The minutes indicate there is no firm consensus, suggesting December is shaping up to be one of the most closely contested policy decisions since the Fed began its battle against inflation.
Some officials emphasized still elevated inflation risks; others pointed to cooling labor conditions and declining demand. With both sides armed with recent data post-meeting, including softer CPI, stable unemployment claims, and cooling retail activity, December could hinge on the next two data reports.
For now, the market is recalibrating to a scenario where liquidity is tightening, political uncertainty is increasing, and Bitcoin is in a structurally vulnerable zone until buyers regain the initiative.
If the Fed chooses to hold in December, markets may need to prepare for a longer plateau than expected and more volatility ahead.
