US Fed FOMC Meeting Minutes Show ‘Cautious Approach’ Amid Trump Tariff Uncertainty

The US Fed FOMC meeting minutes for May is out, underscoring the focus on a “cautious approach” regarding handling of the economy amid President Donald Trump’s tariff uncertainty. While the market has adjusted to the realities around a no interest rate cut, the behind-the-scenes conversation is also fueling new stock and crypto market reactions.

FOMC Meeting Minutes, Key Takeaways

As the Federal Reserve said in its announcement, the economic decisions in the minutes were based on the information available to the Federal Open Market Committee at the time. One of the Fed’s biggest takeaways was that it was pointing to wait for clarity on the outlook.

The Jerome Powell-led Fed kept interest rates unchanged earlier this month, despite pressure from the Trump administration. As revealed in the May US Fed meeting minutes, the policymakers discussed key monthly inflationary measures.

While the US CPI inflation reading was 2.3%, the Core PCE data was pegged at 2.6%. The Fed noted that these readings are down from their levels 3 years ago. Other core economic indices, such as the employment cost index for total hourly compensation of private industry workers, rose by 3.4% over the 12 months ending in March. Notably, this is well below its year-earlier levels.

Despite these improvements in the economy’s state, the Fed concluded that more data are needed to change the rate outlook moving forward. The next Fed Meeting is now scheduled for June 17 to 18, 2025.

The Trump Tariff Concern

Since the start of this current administration, trade war concerns have always been a major headwind to watch out for. Initial counter-tariffs on top trading partners, including China and the EU, triggered investor jitter and market uncertainty.

The fear of inflation also jumped considerably. However, these fears were allayed when the US PPI and jobless data claims earlier this month showed an improving economy. With this, President Donald Trump has advocated for Fed rate cuts, arguing that the economy is healthy.

While there are projections that one or two interest rate cuts this year may occur, no one knows what will happen at the Fed FOMC meeting next month. As reported earlier, Chicago Fed President Austan Goolsbee recently predicted that the US Fed will reduce interest rates in the next 10-16 months. 

This commentary sparked new enthusiasm in the crypto market.

Bitcoin and Crypto Market Response

It is worth noting that much anticipation trailed the release of the Fed FOMC Meeting Minutes, sparking mild volatility in the price of Bitcoin. The traders on the voting platform Kalshi also resonate with Fed’s hawkish tone and the odds favour only 2 rate cuts in 2025. 

When writing, the top coin changed hands for $107,331.09, down by 2.1% in the past 24 hours. The coin jumped from a low of $106,812.92 to the current level, showing the market’s dependence on macroeconomic shifts.

Altcoins also show bearish drawdowns with Ethereum, XRP, and Binance coin.