Dollar Falls, Bitcoin Rebounds as Fed Minutes Cement September Rate Cut

In the cryptocurrency market, Bitcoin soared 1.4% in the hour-to-minute, extending daily gains to 3%.

The minutes from the July Federal Open Market Committee (FOMC) meeting have further solidified investors’ expectations for a rate cut at the upcoming September meeting, as policymakers highlighted continued progress on disinflation.

The minutes revealed that some participants had considered the “plausible case” for lowering rates as early as the July meeting, a sentiment echoed by Federal Reserve Chair Jerome Powell during the press conference afterwards.

In addition, the moderation in the labor market is expected to continue to contribute to disinflation, particularly in core non-housing service prices.

The path appears set for a September rate cut, with Fed funds futures markets assigning a 61.5% probability to a 25 basis point cut, compared with a 38% chance of a more significant 50 basis point cut.

The likelihood of a more aggressive half-point rate cut rose during Wednesday's session, influenced by a downward revision in annual nonfarm payroll estimates through March 2024 and supported by the FOMC minutes. #fed