Bitcoin and Ethereum barely budged on Wednesday, even after the Federal Reserve released minutes from its July policy meeting. Traders had braced for volatility, but crypto markets shrugged off the update, focusing instead on a growing source of uncertainty: Donald Trump’s trade tariffs.
Fed Minutes Deliver No Surprises
The Federal Open Market Committee (FOMC) kept interest rates steady at 4.25%–4.5% in July. The minutes showed two dissenters—Fed Governors Christopher Waller and Michelle Bowman—who pushed for a modest 25-basis-point cut.
Overall, the Fed described inflation as “somewhat elevated” and noted that U.S. economic growth had “moderated” in the first half of 2025. Policymakers reaffirmed their 2% inflation target while pledging to stay flexible if risks intensify.
JULY FOMC MINUTES: INFLATION RISKS SEEN OUTWEIGHING JOBS & OFFICIALS WARN ON ASSET VALUATIONS
— Shay Boloor (@StockSavvyShay) August 20, 2025
Polymarket odds now favor 2 rate cuts in 2025 -- with +140 as the most likely scenario this year. pic.twitter.com/es1l2mPyjy
Markets weren’t surprised. Futures had already priced in an 83% chance of a September rate cut, according to CME FedWatch data, so crypto traders found little reason to reprice risk. Attention now turns to Fed Chair Jerome Powell’s speech at Jackson Hole later this month.
Why Tariffs Matter More Right Now
While the Fed minutes landed softly, investors are increasingly watching Trump’s escalating tariffs. Recent measures on semiconductors, electronics, and steel have begun rippling through global supply chains.
- Sony raised the price of its PlayStation consoles by $50 following tariffs on Japanese electronics.
- Brazil and India face new U.S. trade penalties, fueling broader tensions.
These policies complicate the Fed’s job. On one hand, tariffs push prices higher—an inflationary force. On the other, they weigh on growth and exports, tightening financial conditions. Balancing those conflicting effects may prove far harder than addressing a typical slowdown.
While FOMC minutes are prepared to reflect the meeting in question, they are also undoubtedly used as a signalling tool...inflation risk > employment risk is the key takeaway...this is a Fed where, the majority at least, are in no hurry to cut...nor should they be...
— Michael Brown (@MrMBrown) August 20, 2025
The Bigger Picture: Macro Collision Course
The U.S. is on what some analysts call a “macro collision course”: monetary policy pulling one way, trade policy pulling another.
- If the Fed cuts rates, it could support slowing growth but risk stoking tariff-driven inflation.
- If it holds rates high, it may fight inflation but risk worsening the slowdown.
For crypto, this policy tug-of-war is more consequential than the Fed’s July minutes. Traders see trade policy as the true wild card—one that could push inflation higher, strain global growth, and shift flows into or out of Bitcoin as a potential hedge.
What’s Next for Bitcoin and Ethereum
Until clarity emerges from either Powell’s Jackson Hole remarks or the trajectory of Trump’s trade war, Bitcoin and Ethereum may remain range-bound, moving more on macro headlines than blockchain fundamentals.
For now, the market mood can be summed up in one word: waiting.
