Bitcoin and Ethereum Climb as Fed Minutes Reveal Divergence on Rate Cuts

Bitcoin and Ethereum faced a temporary dip but regained traction following the Federal Reserve’s release of minutes from their July monetary policy meeting, revealing that the dissenting governors on the Federal Open Markets Committee (FOMC) failed to gather additional support.

“A few members opted to lower the target range for the federal funds rate by 25 basis points during this meeting,” the minutes indicated. “These members felt inflation was nearing the Committee’s objective of 2 percent, excluding tariff impacts, and that elevated tariffs were unlikely to persistently influence inflation.”

Immediately after the release, Bitcoin was trading at $114,253, up 0.6% over the past hour, while Ethereum was priced at $4,347, up 1.2% for the same period. The two leading cryptocurrencies had slightly decreased after the announcement, on a generally positive day for crypto markets.

Federal Reserve Governors Christopher Waller and Michelle Bowman, currently serving as vice chair for Supervision, have indicated a preference for reducing interest rates sooner rather than later. A cut in interest rates could strengthen the crypto market by increasing the availability of capital for investments.

This marks the first instance of two dissenting governors since 1993. The last time a Fed governor voiced an objection was in September 2024, when Bowman advocated for a 0.25% cut instead of the half-point rate ultimately agreed upon by the bank.

Weeks after monetary policy meetings, the Fed publishes minutes providing insights on how the committee reached its decisions. The upcoming FOMC meeting is scheduled for September.

Bowman justified her dissent by referring to inflation “approaching the committee’s target after disregarding temporary tariff impacts, a labor market near full employment with indications of reduced dynamism, and slowing economic growth this year.”

The FOMC has historically aimed for a 2% inflation rate. The latest Bureau of Labor Statistics report indicated that inflation ticked up slightly in July to a 2.7% annual rate. Core inflation, which excludes more volatile food and energy prices, was higher at over 3%.

Bowman “also expressed her belief that acting to gradually move the policy rate towards its neutral level would have proactively addressed a further economic slowdown and mitigated risks to the labor market,” the minutes noted.

As many traders prepare for Federal Reserve Chair Jerome Powell’s address at the Jackson Hole summit on Friday, the minutes provide a gauge on the governors’ sentiments.

Intense pressure has been applied to lower rates by U.S. President Donald Trump, which has included threats to dismiss Fed Chair Jerome Powell, although the president has yet to act.