FOMC Minutes Spark Risk-Off Mood, Halting Crypto’s Momentum

Fed Minutes Signal Inflation Jitters, Sending Crypto Rally Into Retreat

Markets took a cautious turn on Wednesday after minutes from the Federal Reserve’s late-July meeting revealed that most policymakers remain more concerned about inflation than employment, weighing on risk assets — including cryptocurrencies.

“A majority of participants judged the upside risk to inflation as the greater of these two risks,” the minutes noted, highlighting ongoing uncertainty over tariffs and the potential for inflation expectations to become unanchored.

The release promptly cooled a modest crypto rebound. Bitcoin (BTC), which had been up 0.7% on the day, slipped back toward flat, trading near $113,300. Ether (ETH), which had outperformed with a 4.5% intraday rally, pared gains to just 2.3%, last changing hands at $4,270.

The policy meeting, however, preceded the U.S. employment report released on August 1. That report showed a weaker-than-expected July payroll gain, along with a sizable downward revision of 258,000 jobs from the previously reported May and June data.

Had that labor weakness been available to Fed officials in July, the minutes might have taken a less hawkish tone — potentially even laying the groundwork for a rate cut.

All Eyes on Jackson Hole

The next major test for markets will be Fed Chair Jerome Powell’s Friday speech at the annual Jackson Hole Economic Symposium. The event has historically served as a platform for major policy signals.

So far, Powell has stayed firmly in hawkish territory, but with more inflation and jobs data due before the Fed’s September meeting, traders will be looking for any signs of a shift toward a more accommodative stance.

Consensus expectations suggest Powell may adopt a “wait-and-see” message — acknowledging the uncertain outlook while resisting any immediate commitment to policy easing.

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