The crypto market awaits the US FOMC minutes next week, especially after the Federal Reserve kept the policy rates unchanged at its latest gathering. Having said that, investors are eagerly waiting for the US FOMC minutes for cues, as Fed Chair Kevin Warsh has hinted towards a hawkish path ahead.
In addition, market experts have also said that the US central bank might move with tightened monetary policy plans to curb inflationary pressure. Considering that, the crypto market participants are staying on the sidelines, as the higher interest rate might hinder the much-anticipated rally in the digital assets space.
Crypto Market Awaits US FOMC Amid Hawkish Anticipation
Crypto market watchers are closely watching the upcoming US FOMC minutes for fresh signals on the Federal Reserve’s policy outlook. The central bank has already held interest rates steady for the fourth straight meeting this year.
However, policymakers continue to express concerns over persistent inflation, keeping the possibility of tighter monetary policy on the table. Recent comments from Federal Reserve Chair Kevin Warsh have strengthened expectations that policymakers remain committed to controlling inflation.
Speaking during the ECB Forum in Sintra, Portugal, Warsh indicated that the Fed would continue to prioritize price stability despite growing political calls for lower borrowing costs. Market participants interpreted his remarks as a reminder that monetary policy decisions will remain independent of political influence.
If the US FOMC minutes reinforce this cautious approach, investors may scale back expectations for near-term policy easing. Such a scenario could reduce demand for risk-sensitive assets, including the crypto market.
US Fed Rate Hike Anticipation Soars
The latest US Job data came in cooler than Wall Street estimates, which has offered temporary relief to investors. However, despite the easing data, market experts have hinted towards a potential Fed rate hike in September, which has spooked crypto traders.
Allianz analyst Ludovic Subran recently told Bloomberg Television that despite the easing US Job data, inflation is likely to peak above 3.7%. He has cited the soaring AI demand and energy-fueled economy behind his prediction.
In addition, he also predicted a potential Fed rate hike in September. According to the CME FedWatch Tool, the odds of a potential 25 bps Fed rate hike now sit at 45.4%.
Meanwhile, a tightened monetary policy environment often limits capital flowing into risk-bet assets like the crypto market. As a result, traders remain reluctant to take aggressive positions before receiving greater clarity from the Federal Reserve at the upcoming US FOMC minutes on Wednesday, July 8.
