FOMC hawkish signals suppress interest rate cut expectations! Bitcoin and the crypto market face a major test in September

The minutes from the Federal Reserve (FED) meeting in July indicate that officials generally believe the inflation risk is greater than the unemployment risk, and they regard inflation data as the core basis for interest rate decisions, significantly reducing the likelihood of a rate cut in September. Nevertheless, Bitcoin (BTC) and the Crypto Assets market remained stable after the announcement, but as the September employment report and the FOMC meeting approach, market fluctuations may intensify.

FOMC Meeting Minutes Signal Hawkish Stance

According to the latest published minutes of the July meeting, Federal Reserve officials leaned towards using inflation data rather than unemployment rates as the basis for interest rate decisions. This stands in stark contrast to last September's position, which cited a weak labor market as a reason for rate cuts.

The minutes indicate that most policymakers believe it is still too early to ease policies, with only Board members Christopher Waller and Michelle Bowman supporting a rate cut. This is also the first time in over 30 years that multiple governors have voted against a rate decision.

The hope for interest rate cuts is slim, and the employment data in September will be critical

The Kobeissi Letter points out that using inflation as the main assessment criterion means that the timing of interest rate cuts may be delayed. The CPI in July remains at 2.7%, while the PPI has increased by 0.9% compared to the previous quarter, marking the largest increase in more than three years, indicating that price pressure still exists.

Despite the addition of 73,000 jobs in the U.S. in July, the data for May and June were both revised downward, with decreases of 125,000 and 133,000, respectively. Since the latest employment report had not been obtained by the time of the July meeting, the data to be released on September 5 will be crucial for decision-making, potentially determining whether the Federal Reserve (FED) will maintain the interest rate or initiate a rate cut.

Bitcoin and the crypto market stabilized after a brief pressure

After the minutes of the meeting were released, Bitcoin briefly fell below $113,000 but quickly rebounded to $114,000. Ethereum (ETH), Ripple (XRP), and Solana (SOL) rose by 3%, 2%, and 4% respectively, indicating that the market's reaction to short-term negative news was limited.

Analysts point out that the correlation between Bitcoin and interest rate decisions has significantly increased in recent years. If the September meeting releases further hawkish signals, market fluctuations may intensify, especially in the context of macroeconomic data and policy uncertainty.

September will be a turning point for the Crypto Assets market

Ahead of the September FOMC meeting, investors will closely watch Fed Chair Powell's speech at Jackson Hole this Friday for clues on policy direction. The Kobeissi Letter assesses that if Powell believes inflationary pressures remain high, he may choose to keep interest rates unchanged, delaying the timing of rate cuts.

For the crypto market, the employment report and interest rate decision in September will be a double test, potentially triggering significant fluctuations in Bitcoin and major altcoins. Investors should plan risk management strategies in advance and closely monitor changes in the macroeconomy and on-chain capital flows.

Conclusion

The hawkish signals released in the FOMC July meeting minutes have further diminished hopes for a rate cut in September. Although Bitcoin and the encryption market remain stable in the short term, the market may face a new round of severe fluctuations as key economic data and policy decisions approach. For more real-time market information and in-depth analysis, please follow the official Gate platform.