BTC plunged! The Federal Reserve is concerned about inflation and has a cautious attitude towards interest rate cuts, implying that Trump's immigration and tariff policies are impacting.

Minutes of the December meeting of the Federal Reserve (Fed) showed officials expressing concerns about inflation risks and the potential impact of Trump's policies, indicating a cautious approach to rate cuts. Although not directly mentioning Trump, the meeting summary repeatedly mentioned the potential impact of changes in immigration and trade policies on the U.S. economy.

Before the deadline, Bitcoin was 95184, with a 24-hour decrease of 1.94%.

Trump's policies cause concerns about inflation

Meeting records show that Federal Reserve officials remain cautious about the radical policies that the Trump administration may adopt, particularly changes in immigration and trade policies, including imposing punitive tariffs on China, Mexico, Canada, and other countries, relaxing regulations, and implementing plans for large-scale deportation of immigrants.

The specific direction and extent of these actions are not yet clear, making the Fed's decision-making highly uncertain. "Almost all participants judged the upside risks to inflation expectations to increase," the record said, attributing it to higher-than-expected recent inflation data and the impact of potential policy changes.

(Trump proposed to rename the "Gulf of Mexico" to the "Gulf of America," sparking a naming rights dispute)

The Federal Reserve is slowing down the pace of interest rate cuts.

The Federal Reserve decided to lower the benchmark interest rate to a target range of 4.25%-4.5% at the December meeting, but the expected rate cuts for 2025 have been reduced from four to two since the September meeting. Market expectations are that the Federal Reserve may only cut interest rates once or twice in 2025, and it is expected to hold steady at the meeting on January 28-29.

The meeting minutes further indicate that the future pace of interest rate cuts will significantly slow down. The minutes stated, 'Participants indicated that the Committee is approaching the point of appropriate slowing in the pace of policy accommodation.' In addition, officials unanimously believe that the current policy rate is close to a neutral level, which means that more cautious policy adjustments will be needed going forward.

Stable economic conditions reinforce a cautious stance: the inflation rate remains above the target

Federal Reserve officials emphasized that the stability of economic activity is another major consideration in adopting cautious policies. Although consumer spending remains robust, the labor market is stable, and the domestic gross domestic product (GDP) growth rate is above trend, the inflation rate is still higher than the annual target of 2%.

The core inflation rate in November was 2.4%, with an overall inflation rate including food and energy prices of 2.8%. Although the Fed predicts that inflation will gradually fall to 2%, records show that most officials believe this target may not be achieved until 2027.

Policy adjustments under high uncertainty

Federal Reserve Chairman Jerome Powell likened the current policy decision-making scenario to driving in a foggy night or entering a dark room full of furniture at the press conference on December 18th. He pointed out that in such a high level of uncertainty, the committee has taken a gradual approach towards a neutral policy stance.

This has also been reflected in the minutes of the meeting, and many participants believe that the current high level of uncertainty requires the committee to act with caution in order to assess the evolution of economic activity and inflation.

Future Interest Rate Reduction Plan and Long-term Outlook

The Fed's "dot plot" shows that committee members expect two more rate cuts in 2026, possibly one or two more after that, ultimately lowering the long-term target for the federal funds rate to 3%. Future policy actions will depend on the development of economic data and will not follow a fixed timetable.

In summary, the minutes of the Federal Reserve's meeting indicate that although the policy remains accommodative in the short term, future adjustments will be more cautious as the policy interest rate approaches the neutral level. The balance between inflation risk and economic stability will be a core consideration in the Federal Reserve's future policy decisions.

This article Bitcoin fell! The Federal Reserve is concerned about inflation and has a cautious attitude towards interest rate cuts, suggesting that Trump's immigration and tariff policies are impacting.