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9 votes vs 3 votes is just the surface: the minutes hide a far more hawkish Federal Reserve than the vote suggests You think 9:3 is the whole truth? Naive. In the early hours of August 20 Beijing time, the Federal Reserve released the July FOMC meeting minutes. The headline is: 9 votes in favor, 3 votes against, maintaining the interest rate at 3.5%-3.75% unchanged. Dallas Fed's Logan, Cleveland Fed's Hummock, and Minneapolis Fed's Kashkari voted against, advocating a 25 basis point rate hike. Only 3 people opposed, right? Wrong. The minutes show that the voices supporting a rate hike are far more than just these 3. Two other presidents without voting rights in July—Kansas City Fed's Schmidt and St. Louis Fed's Moser—publicly stated after the meeting that if they had voting rights, they would have voted for a rate hike. According to the Fed minutes' wording habits, "many" among the 19 decision-makers means nearly half. This is not just 3 opposing votes. This is a hawkish stance from nearly half the members. What do those supporting rate hikes think? They believe price pressures are "broad-based." The committee should adopt a more restrictive policy stance. More painfully, this sentence: if no action is taken now, the future may face "larger and more costly" consecutive tightening. In plain language: if you don't raise rates now, you'll have to raise them more aggressively later. Some officials even believe current financial conditions "are insufficient to bring inflation down to 2%." Inflation has been above 2% for five consecutive years. July's total PCE price inflation rate was 4.1%, core PCE 3.4%. The Fed's toolbox has never discarded the hammer of rate hikes. But how did the market react? After the minutes were released, Bitcoin rose more than 5%, returning to $69,000. Ethereum was even stronger, surging nearly 20% in one day. Over $1.8 billion in liquidations occurred across the entire network within 24 hours. A hawkish minutes, yet the crypto market is celebrating? Why? Because the content of these minutes is already "lagging behind the recent weak economic data." Two things happened after the minutes meeting: First, July nonfarm payrolls unexpectedly decreased by 23,000. The market expected an increase of 80,000. May and June data were revised down by a total of 103,000. Second, July core CPI year-on-year dropped to 2.5%, the lowest in over five years. CME data shows the probability of a rate hike in September has dropped from over 70% at the end of July to 32.7% now. The data is softer than the minutes, and the market chooses to believe the data. But here lies a bigger trap. No official in the minutes supports a rate cut. The policy debate has clearly shifted from "when to cut rates" at the beginning of the year. September may stay unchanged. But what about October? December? Federal funds futures pricing still shows a 65% chance of a rate hike within the year. 65%. What does this mean for crypto? The narrative of "rate peak is set" is being reopened. The market is now pricing in no change in September. But what about October and December? Fed Chair Powell is still pushing to reduce the annual meetings from 8 to 6. Fewer meetings = greater impact per decision. Don't be lulled by the 67% probability of no change. The real signal from the minutes is: the Fed's "rate hike option" has never left the table. The market is never trading the current rate but the future expectation gap. At the end of July, the market thought the rate hike probability was over 70%, but no hike happened. Now the market thinks September will likely stay put, but what if it doesn't? This $69,000 crypto rebound is trading on "weaker data = rate hike canceled." But what if inflation just won't come down? What if the Middle East conflict continues to push up energy prices? What if the AI investment boom continues to drive inflation? The Fed's hammer is still hanging on the wall. You think it won't fall— But it could at any time. $BTC $ETH $XAU #美联储7月FOMC纪要9比3，官员加息分歧仍在