Bitcoin, Ethereum Rise After Fed Minutes Shed Light on Rate Cut Dissent

Bitcoin and Ethereum dipped briefly before regaining momentum in the hour after the Federal Reserve released minutes from its July monetary policy meeting, showing that the two dissenting governors on the Federal Open Markets Committee (FOMC), couldn't convince others to join them.

"A couple of members preferred to lower the target range for the federal funds rate by 25 basis points at this meeting," the minutes revealed. "These members judged that, excluding tariff effects, inflation was running close to the Committee’s 2 percent objective and that higher tariffs were unlikely to have persistent effects on inflation."

Following the release, Bitcoin was recently trading at $114,253, up 0.6 over the past hour, and Ethereum was changing hands at $4,347, up 1.2% for the same timespan. The two largest cryptocurrencies by market value had fallen slightly after the release on an otherwise strong day for crypto markets.

Federal Reserve Governors Christopher Waller and Michelle Bowman, who's now vice chair for Supervision, have been signaling they’re in favor of reducing interest rates sooner rather than later. An interest rate cut would likely buoy the crypto market by freeing up capital for investments.

There haven't been two dissenting governors since 1993. The last time one Fed governor offered an objection was September 2024, when Bowman preferred a 0.25% cut instead of the half-point on which the bank settled.

But a few weeks after each monetary policy meeting, the Fed releases minutes that shed light onto how the committee arrived at its decision. The next FOMC meeting is in September.

Bowman backed her dissent by pointing to inflation "moving considerably closer to the committee's objective, after excluding temporary effects of tariffs, a labor market near full employment but with signs of less dynamism, and slowing economic growth this year."

The FOMC has long held 2% inflation. The most recent Bureau of Labor Statistics report showed that inflation ticked up slightly in July to a 2.7% annual rate. Core inflation, which strips away more volatile food and energy costs, was hotter at more than 3%.

Bowman "also expressed her view that taking action to begin moving the policy rate at a gradual pace toward its neutral level would have proactively hedged against a further weakening in the economy and the risk of damage to the labor market," the minutes added.

Although many traders will be watching Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole summit on Friday, the minutes offer a temp check on the governors.

There’s been an enormous amount of pressure to lower rates from U.S. President Donald Trump. That’s included  threats to fire Fed Chair Jerome Powell, although the president has  yet to act.