Cryptocurrencies did not perform well at all in November, and the effects of the FTX collapse have not yet passed. Next month, the Fed will hold one of the most important meetings of this year and will create a clearer projection of the process after that. Today, at 22:00, the minutes of the previous meeting were published.
Fed Minutes Released
At 22:00, the minutes containing information on the details of the previous meeting were published. At the last meeting, the Fed chairman pointed out the risk of premature easing, saying that they will continue to raise rates until they are sure that inflation is falling. The October inflation data that followed was quite good. Many Fed members have made statements that an increase of 50bp or even below next month may be reasonable. Some members pointed out the risk of excessive tightening and pointed out that they should take more cautious steps. The details of the October meeting were revealed in the Fed minutes published today. These minutes will give us important ideas about the steps to be taken at the December meeting.
So what are the notable headlines in the Fed meeting minutes?
22:00 FOMC Minutes are announced.
Most Fed Officials Supported Slowing the Pace of Rate Hikes Soon
Participants agreed that a slower pace of interest rate hikes, given the uncertain delays associated with monetary policy, would allow the FOMC to better assess progress towards its goals.
With the approach of a sufficiently restrictive level, the “final target” has become more important than interest rate increases.
A few participants argued that slowing the rate of interest rate increases could reduce financial system risks, while others argued that further progress on inflation should not be made to slow down.
The probability of a 50bp increase in December has increased to 79%. (FedWatch)
Observing that the labor market remains tight participants (the last from the data pointed to weakening) of the labor market, many participants progressively better supply-demand equilibrium is moving toward signs that pointed to.
Some respondents stated that stricter policies are compatible with risk management, while others observed an increased risk of “excessive tightening”.
Participants agreed that the risks to the inflation outlook are to the upside.
Fed Minutes and Crypto Coins
To summarize, according to what Fed members said at their meeting before the recent positive data, they will increase by 50bp in December. As we mentioned in the evening, the unemployment data and inflation (announced after the meeting) came as the Fed members wanted. So at the meeting next month, Powell may take a softer stance. Although this expectation threw the Bitcoin price above the 16.700 dollar level, it has fallen to the 16.400 dollar for now.
If we do not see more FTX-related bankruptcies in the coming days, the latest developments may increase the risk appetite of investors and we may climb to the $ 18,000 levels again. The Fed will also want to see a decline in inflation data to be released next month. This development can quickly move crypto coins up (if they come low).
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