Fed Minutes Undermine Crypto Rebound as Inflation Risks Remain Front and Center
Cryptocurrencies lost steam Wednesday after the Federal Reserve’s July meeting minutes revealed that policymakers remain firmly focused on inflation, curbing optimism for a sustained crypto rally.
According to the minutes, “a majority of participants judged the upside risk to inflation as the greater of these two risks,” referencing uncertainties tied to tariffs and the risk of inflation expectations becoming unanchored.
The release had an immediate effect on digital assets. Bitcoin (BTC) slipped from a 0.7% gain to trade nearly flat at $113,300. Ether (ETH), which had been among the session’s top performers, fell from a 4.5% rise to a 2.3% gain near $4,270.
Fed Reaction May Have Been Different With New Jobs Data
Importantly, the meeting took place before the August 1 jobs report, which showed weaker-than-expected July hiring and a substantial downward revision of 258,000 jobs for June and May. Analysts note that had this labor data been available during the meeting, Fed officials might have struck a more dovish tone — potentially even weighing a rate cut.
Focus Shifts to Jackson Hole
Looking ahead, attention turns to Fed Chair Jerome Powell’s keynote at the Kansas City Fed’s Jackson Hole symposium later this week. The annual gathering has previously served as a venue for major policy signals.
While Powell has maintained a hawkish stance, markets will be listening closely for any indication of softening, especially with more employment and inflation data due before the Fed’s next decision in September.
For now, expectations are that Powell will adopt a “wait and see” approach — recognizing ongoing inflation risks while leaving room for data-dependent policy adjustments.
