The Fed's July 28–29 FOMC minutes, reflecting a 9–3 vote to keep interest rates at 3.5%–3.75% with three members favoring a 25 bp hike, will be parsed for whether more officials want tighter policy and whether a September move remains plausible. With a data-dependent stance, a softer jobs report and the CME FedWatch Tool now pricing a 32.8% chance of a September hike (67.2% unchanged) ahead of the Sept. 16 meeting, near-term rate risk has eased which may be supportive for crypto and other risk assets, though lingering inflation risks could keep upside pressure on rates.

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All eyes are now on today’s minutes from the Federal Open Market Committee’s July 28-29 meeting. The minutes are expected to give markets a closer look at the Fed’s 9-3 decision to keep interest rates at 3.5%-3.75% and show how strongly officials disagreed over the next move.

What Makes the July FOMC Minutes Important?

The biggest point to watch is the 9-3 voting split. The three dissenting members, Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, wanted the Fed to raise rates by 25 basis points.

They said that inflation remains too high and that some price pressures, including higher energy costs, could keep inflation above the Fed’s 2% target.

However, the other nine officials voted to keep rates unchanged. Markets will now look closely at the minutes to see whether some of those nine members also supported a rate hike but preferred to wait for more economic data.

If several officials showed support for tighter policy, it could keep a September rate hike on the table.

Fed Keeps Policy Data Dependent

The minutes are also expected to show how officials are thinking about future rate decisions. The Fed has moved toward a meeting-by-meeting approach, meaning there is no fixed plan for the next rate move.

Instead, officials are watching inflation, jobs, and economic growth before deciding whether rates should move higher or lower.

This makes upcoming data, especially the next jobs and inflation reports, more important for markets.

Will the Fed Hike Rates in September?

Rate hike expectations have changed sharply since the July meeting. Markets were earlier pricing in about a 60% chance of a 25-basis-point rate hike in September.

According to the CME FedWatch Tool, the expectation has fallen to 32.8% of a rate hike in September. While the market sees a 67.2% chance that the Fed will leave rates unchanged in September.

A weaker U.S. jobs report has played a major role in changing these expectations. With the labor market showing signs of cooling, the Fed may prefer to wait for more data before making another rate move.

The next FOMC meeting is scheduled for 16 September.

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