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Market Reactions to FOMC Minutes

The U.S. central bank is continuing its efforts to curb inflation by raising interest rates.

Key Points

      FOMC July Minutes released.

    • Members unanimously agree on the need to keep rates high as a means of fighting inflation.
    • The market was predictably cool before the news, and it hasn’t been much better since.

    FOMC7 The minutes of the monthly meeting were released today, and the market reaction was lukewarm.

    Future rate hike

    According to the minutes of the meeting, the Fed may raise interest rates again From last month’s Federal Open Market Committee (FOMC) meeting, released today.

    In July, the 0.75% rate hike will raise the interest rate to 2.25% to 2.5% interval. The FOMC now plans to double its balance sheet contraction rate in September.

    Interest rate hikes and balance sheet reductions will be subject to market conditions and will its react. They further suggested that it may be necessary to adjust the pace of tightening to assess its real impact on inflation. Minutes of the meeting:

    “Members They agreed that, in assessing the appropriate stance of monetary policy, they will continue to monitor the impact of new information on the economic outlook and are prepared to adjust the stance of monetary policy, as appropriate, should risks arise that could affect monetary policy and hinder the achievement of the Committee’s objectives.”

    Before the minutes of the meeting are released Markets were predictably cool in the hours leading up to the announcement; major cryptocurrencies and stock indexes showed steady downtrends in the hours leading up to the announcement. However, in the hours since the minutes were released, stocks and crypto markets appear to have reacted to the news in opposite ways. The Nasdaq and Dow Jones Industrial Average saw brief spikes immediately after the release — from 12,935 to 13,053 and from 33,988 to 34,159, respectively, in the first hour. However, both were short-lived and they are now trading at pre-announcement levels.

    Cryptocurrencies, on the other hand, took a direct but modest hit. Following the announcement, both Bitcoin and Ethereum continued to decline modestly. They suffered losses of 2.5% and 2%, respectively, on the day.

The Federal Open Market Committee is the policy arm of the Federal Reserve that oversees monetary policy. Throughout the year, it has repeatedly raised the federal funds rate from near-zero COVID-19-era rates to moderate inflation.

Disclosure: In As of this writing, the author of this article owns BTC, ETH, and other cryptocurrencies.

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