The FOMC minutes were published recently. At its last meeting in June, the Fed increased interest rates by 75 basis points to 1.75 percent. The FOMC minutes announced today at 21:00 are closely related to Bitcoin and gold. Here’s what awaits the crypto and gold market
What came out of the FOMC minutes for Bitcoin and gold?
The Fed has been raising interest rates for a while to intervene in inflation. The Central Bank had increased the interest rate by 75 basis points at its June meeting. This evening at 21:00, there are statements containing the opinions about the meeting held on this date. The following items emerged today from the FOMC minutes, which are planned for the coming months.
- Growth forecasts for 2022 and 2023 have been lowered.
- If inflation continues, interest rates will continue to rise.
- It will take time to bring inflation down.
- The Commission welcomes further rate hikes.
- Inflation may be permanent.
It remains below $ 1,730 during the statements.
The gold market continues its sharp decline. The price is trading above $1,730 an ounce as the Fed signaled more aggressive monetary policy tightening later this month. According to some economists, the minutes of the Central Bank’s June monetary policy meeting came as a few surprises for the market, as the Central Bank continued to focus on increasing inflation rather than growth.
“Most agreed that the risks to inflation were to the upside and cited several such risks, including those associated with continued supply bottlenecks and rising energy and commodity prices,” the minutes said. At the same time, the Committee saw increased risks to the economy. The FOMC minutes, released on June 6, include:
Respondents judged that uncertainty over economic growth increased over the next few years. Downside risks include the possibility that further tightening in financial conditions will have a greater-than-expected negative impact on economic activity.
Gold market under pressure but little reaction to last minutes
August gold futures were last traded at $1,736.60, down 1.55% on the day. The minutes also highlighted the potential for another 75 basis point rate hike later this month.
Participants agreed that a 50 or 75 basis point increase would be appropriate at the next meeting. In the minutes, participants agreed that the economic outlook warranted a restrictive policy stance and acknowledged that an even more restrictive stance might be appropriate if high inflation pressures persist.
Some analysts are questioning the Federal Reserve’s determination as recession clouds begin to gather. But the minutes show that the Fed appears determined to fight inflation.
Many participants agreed that a significant risk currently facing the Committee is that hyperinflation could become entrenched if the public begins to question the Committee’s determination to adjust its policy stance as warranted. In this regard, the participants emphasized that appropriate tightening of monetary policy together with clear and effective communication will be essential for restoring price stability.
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