$BTC Today, let's go over the FOMC minutes from last night:

Summary of last night's FOMC meeting is as follows:

-Concerns that inflation will not decline as expected

-Some members want to maintain high interest rates for longer

So:

-US10Y rises due to expectations that the Fed will be more hawkish

-Futures are down, indicating that the market is starting to 'give up hope' for significant interest rate cuts in 2025 (see the chart below)

👉U.S. Treasury yields rose on Wednesday after the latest Federal Reserve meeting minutes from May 6-7 were released, showing concerns from the U.S. central bank about tariffs and their impact on inflation and economic activity.

Treasury yields rose across the curve after the Fed signaled caution; the market is pricing in a 45 basis point cut at the end of the year.

The latest Federal Reserve minutes show that officials support a cautious approach to adjusting interest rates amid increasing economic uncertainty and rising recession risks.

In response, the money market is pricing in a 45 basis point rate cut by the end of the year.

The yield on the U.S. 2-year Treasury bond, the most sensitive bond to interest rate changes, rose one and a half basis points (bps) to 3.994%.

The yield on the U.S. 10-year Treasury bond surged three basis points to 4.473%, as market participants remain skeptical that the Fed will cut rates in the first half of the year.

The U.S. 5-year Treasury bond auction worth $70 billion reached a high yield of 4.071%, surpassing the previous auction yield of 3.995%, although still below the average of six previous auctions at 4.204%. On Thursday, the U.S. Treasury is expected to offer $44 billion in 7-year Treasury bonds.

(The current market (May 2025) is pricing that by December 2025, interest rates will be around 3.75–3.80%. Earlier, expectations were even stronger, at one point below 3.5%)

U.S. economic data is very scarce, although the Richmond Federal Reserve reported that manufacturing and services activity continue to show an ongoing economic downturn in both sectors.

This week, investors are watching for the release of GDP and labor indicators on Thursday. By Friday, the release of the Core Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation measure, is expected to show a slight decrease.

Tonight, there will be additional data on PCE, GDP... Everyone should pay attention to the tail risk 🍀🍀🍀