The minutes from the Federal Reserve's June 17-18 meeting have sparked renewed hopes for a possible interest rate cut this year.
Current Fed Position
The Fed has maintained rates at 4.25% - 4.5% for four consecutive meetings, frustrating some investors. However, a clear shift is noted, with most Fed officials now believing that a rate cut is likely in 2024 if inflation continues to fall.
Impact of Tariffs and Economic Slowdown
The Fed is balancing competing forces. On one side, President Trump's recent tariffs may raise prices if businesses pass costs onto consumers. Most Fed officials expect these inflationary effects to be temporary, yet some warn of longer-term risks. Meanwhile, economic data shows a mixed picture, with a gain of 147,000 nonfarm payrolls in June — better than forecasted but weaker than previous months.
Expectations Ahead of July 30
The Fed remains in a 'wait-and-see' mode. The key test will be July's economic data, especially the June CPI numbers due on July 11. If inflation continues to cool, a July 30 rate cut becomes more likely.
If a rate cut is confirmed, August could become a breakout month for the crypto market.
