The Fed released the minutes of the Federal Open Market Committee (FOMC) September meeting. According to the minutes, the Fed remains committed to lowering inflation even as the economy slows. After the Fed Minutes were released, the gold and crypto market did not react seriously.
Fed Minutes point to firmness in policy stance
The Federal Reserve has released its September Fed Minutes, providing clues on marching route and pace. cryptocoin.comAs you follow, Fed officials decided that they needed to adopt and maintain a more restrictive policy stance to meet their high inflation targets.
Many participants stepped up their assessments of the federal funding pathway needed to meet committee goals. Many respondents indicated that once the policy reaches a sufficiently restrictive level, it would be appropriate to hold it there for a while. Several respondents predicted that the risks would become more bilateral as policy became more restrictive. A few participants stressed the importance of maintaining a restrictive stance as necessary.
Despite a slowing labor market, authorities are determined to raise interest rates. Also, the Fed Minutes can be taken as a little less hawkish than the rhetoric we’ve heard from Fed speakers. So, it is likely to lean towards a Fed pivot. This inference is mostly based on the following statements:
Several respondents noted that it would be important to adjust the pace of further policy tightening in order to reduce the risk of a significant negative impact on the economic outlook.
Gold and crypto market remained unresponsive to minutes
Meanwhile, the gold and cryptocurrency market remains under pressure. But markets are not seeing any significant new price action as the Federal Reserve is determined to tighten monetary policy to mitigate the threat of rising inflation. While the Fed sees increased downside risks to the economy, the minutes of its September monetary policy meeting show that the committee remains focused on curbing inflation by raising interest rates. Policy makers underline the following:
Participants reiterated their strong commitment to return inflation to the Committee’s 2% target. Many stressed the importance of staying on course even as the labor market slows.
According to some analysts, the Fed Minutes did not reveal much new information on US monetary policy. Adam Button, chief currency strategist at Forexlive, notes:
I can’t see much here. This is not a surprise. The Fed and the market are in line with a 4.75% march followed by a pause. Markets were largely dormant in the headlines.
The gold market largely ignored the hawkish sentiment in the minutes. Spot gold was up 0.37% at $1,672 at press time. The cryptocurrency market is in a similar state of unresponsiveness. Leading crypto Bitcoin (BTTC) is hovering around $19,144, up 0.70% on a daily basis. The Fed Minutes did not reveal anything different from expectations and Fed speakers. So, the reluctance in the gold and crypto market is actually not so abnormal.
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