The Federal Reserve will release the minutes of the FOMC meeting held from June 16 to 17 at 2 a.m. Beijing time (2 p.m. Eastern Time on July 8). The minutes are highly anticipated not only because they record the complete internal discussions of the first meeting chaired by new Chair Kevin Woor but also because they occur at a crossroads of multiple key turning points.
The June meeting itself sent a strong hawkish signal. The FOMC maintained the federal funds target rate range at 3.50% to 3.75% with a 12-0 vote, marking the fourth consecutive hold. But what truly ignited the market was the dot plot—out of 18 officials providing rate forecasts, 9 expect at least one rate hike before the end of 2026. This number was zero in March this year.
The format of the meeting statement also signals intent. It was significantly shortened to about 130 words, removing the previous language hinting at possible rate cuts and no longer mentioning economic and monetary policy outlooks. This minimalist style reflects Woor’s policy reform approach—reducing guidance and relying more on data.
The importance of the minutes also lies in the timing gap. When the June meeting was held, labor market data had not yet reflected the subsequent softening. The June non-farm payroll report released on July 2 showed only 57,000 new jobs, far below the market expectation of 110,000 to 115,000. The minutes record the judgment at that time, while the market’s current pricing already incorporates the impact of the employment data. This “time lag” will be a key dimension in interpreting the minutes.
What signals does the dot plot reveal about the rate hike path?
The dot plot was the most unexpected part of the June meeting. The median forecast for the federal funds rate by the end of 2026 was raised from 3.4% in March to 3.8%, implying at least one rate hike this year. Among the 9 officials supporting hikes, 3 expect a 25 basis point increase, 5 expect a 50 basis point increase, and 1 expects a 75 basis point hike. Meanwhile, the number of officials expecting rate cuts dropped sharply from 12 in March to just 1.
Woor himself did not submit a rate forecast and explicitly stated that the dot plot is just a scenario judgment with an “eraser,” not a commitment to future policy paths. This signals a shift: the Fed is moving from “telling the market what it will do” to “letting the market interpret what data means.”
The Summary of Economic Projections (SEP) also signals stagflation. The 2026 core PCE inflation forecast was raised from 2.7% in March to 3.3%, and the 2027 forecast from 2.2% to 2.5%. The 2026 GDP growth forecast was slightly lowered. The combination of rising inflation and slowing growth adds complexity to the rate hike path.
How did the non-farm payroll data rewrite the rate hike timeline?
The June non-farm payroll report released on July 2 was the most direct catalyst for recent market expectation shifts. With only 57,000 new jobs, less than half of the expected 110,000 to 115,000, and revisions down by 74,000 for April and May combined, the data dampened expectations of a July rate hike. Before the data, the market priced about a 30% chance of a rate increase in July; after, it fell below 20%.
As of July 7, CME FedWatch shows a 74.3% probability of holding rates steady in July and a 25.7% chance of a 25 basis point hike. For September, the probabilities are 42.9% for no change, 46.2% for a 25 basis point hike, and 10.8% for a 50 basis point hike. This indicates September has become the real battleground for the rate path in the second half of 2026.
The deeper implication of the non-farm data is the overlay of three signals: a trend of slowing employment growth, softening labor market masked by a decline in the labor force participation rate to over five-year lows, and the collective validation of forward-looking indicators. However, the unemployment rate fell from 4.3% in May to 4.2%, suggesting the labor market still retains some resilience. This gives the Fed more policy space in the “employment” dimension, allowing it to focus more on inflation.
If the minutes show officials recognized potential risks to the labor market in mid-June, the current dovish market pricing will be supported; if discussions focus on persistent inflation and rate hike conditions, the rebound logic will be challenged.
Why does inflation stickiness continue to constrain policy space?
Inflation remains the core constraint in the current Fed policy framework. The preferred inflation indicator—core PCE—increased by 3.4% year-over-year in May, reaching a new high since October 2023. The overall PCE price index rose from 3.8% to 4.1% annually. Both metrics are well above the Fed’s 2% long-term target.
The June SEP raised the 2026 overall PCE inflation forecast from 2.7% in March to 3.6%. This indicates that the Fed itself believes the process of inflation returning to target will take longer than previously expected.
Geopolitical factors further add to inflation uncertainty. After three oil tankers were attacked in the Strait of Hormuz, the U.S. launched new military strikes against Iran. Oil prices surged, directly boosting inflation expectations and increasing bets on rate hikes. According to FedWatch, traders currently expect over an 80% chance that the Fed will raise rates by at least 25 basis points before the end of this year.
Fed Governor Christopher Waller recently stated, “Risks have completely reversed”—a shift from a year ago when he advocated tolerating higher inflation due to a weak labor market. Now, with the labor market stabilizing and inflation accelerating, the Fed is re-evaluating its stance. This reveals a fundamental change in internal policy trade-offs.
How will the end of forward guidance change market pricing logic?
The June meeting marked a structural shift in Fed communication. Forward guidance—a tool used for 25 years—is being gradually abandoned. Woor explicitly stated at the European Central Bank forum that “there will be no forward guidance.”
This shift has far-reaching implications beyond a single meeting. For 25 years, markets have interpreted Fed guidance to form rate expectations. Without guidance, each data release—non-farm payrolls, CPI, retail sales—will carry greater weight in shaping rate expectations.
Woor is not alone. ECB President Lagarde expressed regret about being constrained by previous guidance, and Bank of England Governor Bailey and Bank of Canada Governor Macklem echoed similar sentiments at the same forum. This coordinated tone indicates that major central banks are undergoing a structural change in communication, rather than a temporary adjustment driven by individual economic conditions.
For markets, this means risk premiums will become the norm. Investors will focus on real-time data like the Fed, without any prior commitments on the rate path. This uncertainty could amplify reactions to individual data releases, increasing volatility in interest rates and asset prices.
The minutes may reveal how much consensus exists within the committee on this new framework and whether any officials have expressed reservations about this shift.
How can the minutes test the current rebound narrative in the crypto market?
Bitcoin has rebounded about 11% from its 21-month low on July 1, approaching $63,000. But this rally is mainly driven by the easing of rate hike expectations following weak non-farm payroll data. The minutes’ validation of this macro hypothesis is the most critical uncertainty for the current crypto market.
The June meeting was not friendly to crypto markets. Officials kept rates at 3.50%-3.75%, removed language hinting at possible rate cuts, and raised the 2026 median forecast to at least one more hike. Bitcoin continued to weaken in the two weeks after the meeting, as markets priced in a longer period of tightening.
As of July 8, according to Gate data, Bitcoin is around $63,500, down approximately 10.73% over the past 30 days. Ethereum is about $1,780. The overall trend of crypto assets remains heavily influenced by macro liquidity expectations.
If the minutes show officials warned of softening labor markets or excessive tightening in mid-June, the current “Fed forced to pivot” rebound narrative will be supported. If discussions focus on persistent inflation and conditions for further hikes, the rally’s main pillar will be undermined. Bitcoin has already priced in substantial easing, so if the minutes are less dovish than market expectations, it could pressure prices.
What other variables outside the minutes are influencing asset pricing?
Beyond the minutes, several concurrent variables are shaping the macro landscape for the second half of 2026.
Geopolitical risks are re-pricing. U.S. military strikes on Iran have increased safe-haven demand, with the dollar index holding above 101.00. Gold prices have risen to about $4,111 per ounce, and silver to around $60. If energy prices continue rising, expectations for “higher rates for longer” will be reinforced.
U.S. equities are also at a critical juncture. The S&P 500 closed down 0.5% on Tuesday, and the Nasdaq Composite fell 1.2%. Market participants are seeking clues from the minutes about inflation persistence and the timing of rate adjustments.
Gate has launched real U.S. stock trading, supporting over 10,000+ U.S. stocks. Users can trade U.S. stocks, Hong Kong stocks, Korean stocks, and ETFs directly with USDT. This product suite enables investors to complete the full cycle from macro event interpretation to cross-asset allocation within a single platform.
The July 14 release of the June CPI report will be the next key data point. May data showed core inflation at 2.8% annually, with overall CPI up 3.1% YoY. The FOMC meeting at the end of July will be the first real test of Woor’s data-dependent approach. How much weight the committee gives to recent labor market softness will be a crucial reference for July’s decision.
FAQ
Q: What was the specific rate decision at the June FOMC meeting?
On June 17, the FOMC maintained the federal funds rate target range at 3.50% to 3.75% with a 12-0 vote, marking the fourth consecutive hold.
Q: How many officials support a rate hike by 2026 in the dot plot?
Out of 18 officials providing rate forecasts, 9 expect at least one hike before the end of 2026. Among them, 3 support a 25 basis point increase, 5 support a 50 basis point increase, and 1 supports a 75 basis point hike. In March, no officials supported a rate hike within the year.
Q: What are the current market expectations for July and September rate hikes?
As of July 7, CME FedWatch shows a 74.3% probability of no change in July and a 25.7% chance of a 25 basis point hike. For September, the probabilities are 42.9% for no change, 46.2% for a 25 basis point hike, and 10.8% for a 50 basis point hike.
Q: Why did the June non-farm payroll data have such a big impact on rate hike expectations?
With only 57,000 new jobs, far below expectations, and revisions down by 74,000 for April and May combined, weak employment data reduced expectations of a rate hike in July.
Q: Why is the Fed’s forward guidance being abandoned?
New Chair Woor advocates reducing reliance on policy guidance, believing that forward guidance causes over-attachment between the Fed and markets, weakening the market’s data-driven adjustment mechanism. The June statement removed all forward guidance language.
