Bitcoin price surged slightly in response to the Federal Open Market Committee’s (FOMC) July 2023 meeting minutes. The Fed officials opined that the fears of inflation could likely remain stronger than expected, meaning that such risks could require further tightening.
The Fed staff noted in the meeting that “inflation dynamics would prove to be more persistent than expected.” Further, central bank officials see the need to consider the risk of overtightening financial conditions.
Also, the staff opined that inflation pressure could give further adverse shocks to supply conditions in the United States. More importantly, the FOMC minutes report showed that the officials believe there will not be a recession in 2023.
A section of the Fed staff expects that tighter financial conditions could cause a sharper slowdown than anticipated. They also noted that monetary policy tightening appeared to be working broadly as intended, whereas the current inflation remains to be well above the 2% target.
On the positive side, the Fed stated that softening in core goods prices and lower online prices could be signs of stability in its path to controlling rising inflation.
Meanwhile, the Bitcoin price rose by just about 0.3% immediately after the meeting minutes release, whereas the S&P 500 Index dropped slightly before recovering the loss.