Key Takeaways
- Bitcoin fell to $93,000 after the Fed's cautious stance.
- The Fed flagged inflation risks from Trump's trade and immigration policies.
- Core PCE inflation stood at 2.8%, complicating rate-cut decisions.
The Federal Reserve’s December 17–18 meeting minutes, released Wednesday, outlined concerns about the economic impacts of President-elect Donald Trump’s proposed trade and immigration policies.
These policies, officials warned, could intensify inflationary pressures and disrupt supply chains and labor markets.
The Federal Open Market Committee (FOMC) opted for a 0.25% rate cut, emphasizing caution in future monetary easing due to persistent inflation risks.
Core PCE inflation was reported at 2.8% in October, with slow progress expected in reducing it.
The report noted:
Inflation risks remain balanced, though higher-than-expected recent readings warrant close monitoring.
Bitcoin drops amid Fed caution
Bitcoin’s price dropped sharply following the minutes, falling to $92,500 before stabilizing near $93,000.
The decline reflects the market’s sensitivity to the Fed’s prudent approach and uncertainty about Trump’s economic policies, despite his pro-Bitcoin stance.
The crypto market’s response underscores its connection to broader fiscal and monetary policy.
Critics noted the Fed’s proactive stance, with one commenter saying:
The Fed is PROACTIVELY hostile toward the policy of a president it disagrees with.
Market outlook remains uncertain
The FOMC’s focus on measured rate cuts contrasts with concerns over potential inflationary disruptions from Trump’s proposed policies.
With unemployment at 4.2% and steady GDP growth, financial pressures on lower-income households remain a key concern.
As Trump’s policies take shape, both the Fed’s actions and market reactions will likely remain under close scrutiny.
