Bitcoin holds near $68,245 as hawkish Fed minutes revive hike risks

Bitcoin held near $68,245, up 5.3%, after Fed minutes showed three officials favored a hike and Chairman Kevin Warsh floated a six-meeting calendar.

"Many participants assessed that policy tightening would likely be necessary if inflation did not decline," the Federal Open Market Committee minutes said, released Aug. 19. The committee voted 9-3 to hold the federal funds rate at 3.50%-3.75%, with Cleveland's Beth Hammack, Dallas' Lorie Logan and Minneapolis' Neel Kashkari dissenting in favor of a quarter-point increase.

The Fed's preferred inflation gauge, the personal consumption expenditures price index, ran at 3.7% in June, well above the 2% target. Traders entered July pricing a one-in-three chance of a hike, and a full quarter-point move was priced in by September. Long-term Treasury yields have climbed toward 5%, pulling capital toward safer assets and weighing on Bitcoin relative to gold, which gained 3.24% to $4,474.88.

The next FOMC decision lands Sept. 15-16, when markets will learn whether the hawks grow louder or finally get their hike. A hike would tighten financial conditions and drain liquidity from risk assets, while a quieter six-meeting calendar under Warsh would leave traders with fewer policy signals to trade on.

Three Dissents and a Hawkish Core

The minutes showed inflation concerns ran deeper than the headline vote. Several participants said price increases over the past year were broad-based, spanning goods and services, while some noted that even after excluding items most directly affected by tariffs and energy prices, underlying inflation appeared elevated. A few of the dissenting officials judged that raising rates now would help forestall a steeper and more costly sequence of tightening later.

The labor market offered little offset. Nonfarm payrolls fell 23,000 in July even as the unemployment rate dropped to 4.1%, the latter driven by a shrinking labor force. Fed officials have said they are more concerned with inflation than employment, though that was before the latest data.

A Leaner Calendar Means Fewer Signals

Warsh's proposal to cut the FOMC schedule from eight meetings to six, held roughly every two months, would let more information accumulate between decisions and give policymakers more time to consider strategic issues, the minutes said. No decision was made, and the 2026 calendar stands unchanged.

For Bitcoin, the change matters. The asset moves on Fed expectations, and a quieter central bank is a harder one to read. Fewer scheduled decisions could mean sharper swings when they land, as traders lose the regular cadence of policy signals they have traded around for years.

The minutes also flagged AI investment as a two-way variable for inflation. Some officials said the AI buildout is already pushing up demand and prices for chips, steel and skilled labor, while others expect productivity gains to cool inflation later. If AI profitability disappoints, tech stocks could face a repricing that hits risk appetite across markets, including crypto.

Bitcoin's 5.3% daily gain came as spot gold consolidated its own advance, with both assets trading in elevated ranges after the release. The next test arrives Sept. 15-16, when the FOMC decides whether the hawks get their hike.

This article is for informational purposes only and does not constitute investment advice.