Lawmakers acknowledged the persistent inflationary risk stemming from tariffs, geopolitical tensions, and increased AI-driven investments, yet many still forecast that the federal funds rate will remain near the current 3.50%–3.75% range by year‑end, provided inflation continues to decline. The key takeaway is that the Fed remains cautious but is ready to steer decisions based on the latest data.
The yield on 10‑year Treasury bonds stayed high at about 4.57%, while the 2‑year yield hovered near 4.20%, indicating expectations that rates will stay elevated for an extended period. Gold prices held around $4,075 per ounce, the U.S. dollar index remained steady near 101, and Bitcoin traded near $62,000, as investors weighed ongoing inflation risk against stable monetary policy prospects. All these shifts suggest that markets price in a prolonged period of restrictive policy, without anticipating a sharp shock from tightening. The minutes also reaffirmed the Fed’s commitment to maintaining substantial reserves, signaling that lawmakers are not pursuing a sudden liquidity withdrawal despite the restrictive stance.
For crypto markets, the distinction between rates and liquidity is becoming increasingly important. Tight rates keep capital costs high, but adequate reserves mitigate the risk of a broader liquidity shock. This shifts the focus from the Fed meeting itself to upcoming inflation and labor market data. Liquidity conditions are likely to drive sentiment well before the next Fed policy decision, making macro data a key catalyst for digital assets in the second half of the year.
Gracy Chen, CEO Bitget
