More Rate Hikes to Come, According To Latest Fed Meeting Minutes – Here’s What That Means For Crypto

cryptonews.com:

More interest rate hikes are coming from the US Federal Reserve. At least, that was the takeaway from the recently released minutes of the 1st of February meeting of the Federal Open Market Committee (FOMC) earlier this Wednesday. This could be a major medium-term headwind for crypto.

The FOMC, comprised of an assortment of Federal Reserve Governors and regional Fed Presidents, raised interest rates 25 bps to a 4.50-4.75% target range at their meeting earlier this month. That was a slowdown following a 50 bps rate hike at the last meeting of 2022, which was proceeded by four consecutive 75 bps rate hikes.

The meeting minutes said that FOMC members expect further increases to interest rates will be necessary to ensure that inflation comes sustainably back to the 2.0% target. “Almost all” FOMC members backed the slowdown to 25 bps rate hikes. “Upside risks to the inflation outlook remained a key factor shaping the policy outlook,” the minutes stated, while a few officials warned that “insufficiently restrictive” stance could hamper progress on bringing down inflation.

The latest Fed meeting minutes release comes after financial markets have spent the last few weeks increasing their Fed tightening bets. To be more specific, in late January, most analysts were forecasting just two more 25 bps interest hikes – one at the February meeting, which was delivered, and then a final one at the March meeting.

Some market participants were even betting that the 25 bps rate hike in February might be the Fed’s last this cycle. That was represented by the fact that, at the time, the money market implied probability of no rate hike in March, and rates remaining in the 4.50-4.75% range, was around 20%, as per CME data.

However, this month’s