The third week of August started with a slightly bearish tone for digital assets, as the cryptocurrency market plummeted ahead of the minutes from the upcoming FOMC meeting. Since the FOMC meeting in July kept interest rates unchanged and Fed Chairman Jerome Powell did not give hints about upcoming interest rate decisions, all eyes are on this event.
The Fed's minutes will be published tomorrow, Wednesday, August 20, and Powell's speech at Jackson Hole will take place on Friday, August 22, according to the Fed Calendar. Experts anticipate high volatility, as the culmination of these events could be decisive for the cryptocurrency market.
Attention is primarily focused on the minutes, as the central theme of Jackson Hole is employment. Officials are likely to focus on employment data and how these might affect their decision on interest rates.
In addition to the Fed keeping the interest rate stable last month, this time there was a notable division among the members. It is worth noting that, for the first time since 1993 (the start of these meetings), there were dissenting votes as Michelle Bowman and Christopher Waller voted in favor of a 0.25% rate cut.
This aligns with the views of Donald Trump, who has continuously demanded that the Fed cut interest rates several times this year.
Therefore, the enthusiasm surrounding the rate cuts in September is growing significantly. The CME FedWatchTool and other platforms also indicate a high probability of rate cuts, with 100% on CME and 73.6% on Polymarket. However, the U.S. PPI data for July, which exceeded expectations at 3.3% year-on-year, creates uncertainty.
While it is not certain whether the minutes will include comments on the upcoming Fed decision, the highlights from the July meeting and Powell's tone during his speech could provide a hint of the possible decision.
It is important to note that the FOMC minutes and Jerome Powell's speech could also yield unexpected results, following earnings reports, tariff-driven inflation, weekly unemployment claims, etc. However, the minutes and the speech may provide much more clarity on the Fed's decision regarding interest rates.
Additionally, it could provide insights into the actions of the committee members who voted in favor of the rate cuts.
