The Fed minutes are out, and they answer the question from our preview: the market was front-running a pause the Fed hadn't signaled.
Released Oct 7 at 18:00 UTC, the minutes from the September meeting, where the Fed hiked 25 bps to 3.75%-4.00%, show:
- Most participants judged that "another increase" would likely be appropriate by year-end.
- "Some" said inflation risks had tilted further toward prices rising faster than expected.
- Officials promised an "open mind" at each meeting, with no set timing.
- The dovish side exists: Michelle Bowman said there's no urgent need for more hikes this year, and John Williams backed that view.
Markets had priced only about a 17-20% chance of an October hike, but around 80% odds of at least one more before year-end. The minutes landed closer to the second number.
$BTC fell to about $83,065 after the release and is now trading below $83K. Over 24 hours, roughly $998M in crypto futures were liquidated, including about $356M in ETH and $268M in BTC.
The counterpoint is on-chain: about 24,073 BTC left exchanges on net on Monday, the largest single-day outflow since March 1. Someone is withdrawing coins while leverage gets flushed.
Next stop is the FOMC meeting on Oct 27-28. Until then, every jobs and inflation print matters more than usual.
Is one more hike already priced into crypto, or is the market still too optimistic about the Fed?
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