Crypto and stock markets don’t care about Fed’s inflation fears

Source Cryptopolitan

The Federal Reserve dropped its December meeting minutes, and let’s just say the message wasn’t pretty. Inflation is creeping higher, the Fed isn’t feeling generous with rate cuts, and Trump’s economic policies have everyone on edge—even if his name didn’t make it into the official documents.

None of that seemed to bother the markets much though. Stocks and crypto both marched to their own chaotic beat. “Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes revealed.

Officials pointed fingers at strong inflation reports and the potential ripple effects of changes in trade and immigration policies. In response, they hinted at slowing the pace of rate cuts. For traders hoping for relief, that was a major buzzkill.

But did Wall Street care? Not really. The S&P 500 climbed 0.16%, the Dow Jones added 0.25%, and even the Nasdaq, dragged down by tough days for giants like Palantir and Bitcoin whale MicroStrategy, only dipped 0.06%. No big crashes, no panic selling. Investors have seen worse, and they acted like it.

Wall Street shrugs off the Fed’s caution

The 10-year Treasury yield hit a dizzying 4.73% during intraday trading, its highest since April. Normally, a number like that would send shockwaves through the market, but traders barely blinked. Why? Simple. They’ve already priced in the Fed’s pessimism.

December’s dot plot—which forecasted just two measly quarter-point cuts in 2025—was the real blow. Yesterday’s news? Old hat. Christopher Waller, one of the Fed’s governors, stepped in to calm nerves.

Speaking from Paris, he explained that recent inflation spikes were driven by “imputed” prices like housing services. Meanwhile, “observed” prices, which cover other goods and services, show signs of disinflation. Translation: it’s not as bad as it looks. Waller even said he’d back more rate cuts in 2025 if the economy holds up.

While stocks took the news in stride, crypto had a rougher time. Bitcoin slid to $92,000 on Thursday after hitting $102,000 just a few days earlier. Still, crypto enthusiasts remain bullish, convinced that better regulations this year will boost prices and help companies like Coinbase, MicroStrategy, and Robinhood.

Bitcoin’s volatility isn’t new, but it’s hard to ignore its momentum. It’s already up 3% this year after a standout 120% gain in 2024.

Fed’s official statement is confusing

In their statement, Fed officials claimed that the economy is growing “at a solid pace,” but noted the labor market is easing and unemployment has ticked up—though it’s still low overall. Inflation is inching closer to their 2% target but remains elevated, and they’re not taking their eyes off the risks.

The central bank lowered its target range for the federal funds rate by a quarter-point last month, bringing it to 4.25%–4.5%. They promised to keep assessing incoming data and adjust policies if needed, all while sticking to their dual mandate: maximum employment and stable prices.

The Fed also said it would continue reducing its holdings of Treasury securities and mortgage-backed securities, keeping the balance sheet tight. What could shake things up next? The U.S. jobs report for December, due Friday.

A Step-By-Step System To Launching Your Web3 Career and Landing High-Paying Crypto Jobs in 90 Days.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Forex Today: Markets await comments from Fed officials ahead of Friday's job reportHere is what you need to know on Thursday, January 9: The US Dollar (USD) gathered strength against its rivals for the second consecutive day on Wednesday as markets assessed US data releases and news on President-elect Donald Trump's tariff plans.
Author  FXStreet
11 hours ago
Here is what you need to know on Thursday, January 9: The US Dollar (USD) gathered strength against its rivals for the second consecutive day on Wednesday as markets assessed US data releases and news on President-elect Donald Trump's tariff plans.
placeholder
EUR/USD: Below 1.0255 before further losses can be expected – UOB GroupInstead of declining further, EUR is more is likely to trade in a 1.0275/1.0355 range. In the longer run, EUR has to break clearly below 1.0255 before further losses can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Author  FXStreet
11 hours ago
Instead of declining further, EUR is more is likely to trade in a 1.0275/1.0355 range. In the longer run, EUR has to break clearly below 1.0255 before further losses can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
placeholder
GBP/USD: Significant support level at 1.2300 can be out of reach – UOB GroupThe Pound Sterling (GBP) is likely to decline; the significant support level at 1.2300 could be out of reach. In the longer run, risk has shifted to the downside but note that there is a significant support level at 1.2300, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Author  FXStreet
11 hours ago
The Pound Sterling (GBP) is likely to decline; the significant support level at 1.2300 could be out of reach. In the longer run, risk has shifted to the downside but note that there is a significant support level at 1.2300, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
placeholder
Pound Sterling slumps as UK bonds face heavy selling pressureThe Pound Sterling (GBP) underperforms its major peers on Thursday due to a significant jump in the United Kingdom (UK) government’s borrowing costs.
Author  FXStreet
11 hours ago
The Pound Sterling (GBP) underperforms its major peers on Thursday due to a significant jump in the United Kingdom (UK) government’s borrowing costs.
placeholder
XRP Price Rises Against the Tide! Ripple President Hints at Spot ETF ApprovalWhile the broader cryptocurrency market faced a pullback amid expectations of slower interest rate cuts by the Federal Reserve, XRP defied the trend, surging nearly 3% on Thursday, January 9.
Author  TradingKey
13 hours ago
While the broader cryptocurrency market faced a pullback amid expectations of slower interest rate cuts by the Federal Reserve, XRP defied the trend, surging nearly 3% on Thursday, January 9.
goTop
quote