Last Minute: FED Minutes Published, Here’s Bitcoin’s (BTC) First Reaction!

The Fed released the minutes of its last meeting, which may provide further clues about the central bank’s thoughts on inflation and rate hikes, and Bitcoin (BTC) price reacted. Here is the content of the minutes:

Fed officials supported slowing the rate of rate hikes. Fed members predict a higher peak for the final interest rate target. FED members said that there is great uncertainty about the final interest rate and that more data is needed.

While some FED members said that tight monetary policy was compatible with risk management, some members said that excessive tightening increased some risks.

Respondents agreed that there was little sign of easing of inflation pressure.

FED members said that there is a great uncertainty for the final interest rate and that more data is needed.

-Fed Minutes

— Bitcoin System (@bitcoinsystem) November 23, 2022

With the release of the data, an increase in Bitcoin price was observed:

FED Raised Interest Rates by 75 Base Points at its Meeting on November 2

The FED increased interest rates by 75 points at its meeting on November 2, making its fourth such increase. However, Fed Chairman Jerome Powell suggested in his press conference that the institution might soon start to slow down the rate of increase.

Other FED members, especially vice president Lael Brainard, also gave hints in this direction in their last speeches. However, signals from other Fed officials who continue to stress that inflation remains high and need to be contained have been confusing.

According to futures contracts on the CME prior to the release of the Fed minutes, investors are currently pricing in a more than 71% probability that the Fed will raise rates by only 50 percent at its December 14 meeting. This rate is higher than the probability of a 50 percent increase of 52% a month ago, but lower than the probability of a 50 percent increase of 85% priced in last week.

Recent inflation reports indicate that the pace of price increases is finally starting to slow down to more manageable levels. Although the latest unemployment benefits applications have increased compared to a week ago, the employment market in the USA continues to be relatively healthy.

But as long as the labor market remains robust and inflation pressures continue to subside, the Fed will likely reduce the magnitude of rate hikes.

Some experts worry that if the Fed goes too far in interest rates, increases could eventually slow the economy too far, potentially leading to much higher unemployment, job losses, and even a recession.

*Not investment advice.