FOMC July Meeting Minutes and Market Movements

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Markets began to reel back today in preparation for the release of the most recent FOMC minutes from July 26-27 meetings.  The minutes revealed little outside of what many expected, which was that the Fed will continue its hawkish stance for the remainder of the year.  This month's restraint on hiking the interest rate to 100 basis points demonstrates how the Fed is looking to play a numbers game to maintain the delicate balance of the economy.  Raising rates 75 basis points signaled that while the FOMC is aware higher rate hikes may squeeze the economy too tightly, taking too much of a doveish approach may damage the progress made so far.  As a result, the subsequent rate hikes can be expected to be in the range of 50-75 basis points until the end of the year.  If the Fed is looking to ease up the pressure, it's unlikely to occur before 2023.  Despite July’s slowed inflation, the interest rate of 2.25-2.5% is still higher than the original 2% target.   

Although fairly minor, the meeting notes held some influence over the markets seeing the NASDAQ -0.6%, S&P 500 -0.2%, BTC -2.4%, and ETH -2%.  Moving forward all may regain the losses from today throughout the week, but will likely contract again before the next FOMC meeting in September.  For the crypto markets, the recent release of the Fed guidelines for master accounts  in addition to the anticipated Ethereum merge in September has padded its recent losses and posted some gains, showing promise for next quarter’s performance.