The Fed Just Killed the Dovish Pivot

Minutes dropped. Markets flipped. The April 28-29 FOMC meeting was Jerome Powell's last as chair. The readout was his most hawkish yet. Rate cuts are not just delayed. They are being replaced by active preparations for hikes.

🔹 The Majority Shifted
A majority of participants highlighted that "some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent" . This was not fringe chatter. This was the dominant view inside the room.

The vote to hold rates at 3.50-3.75% passed 8-4, the most dissents since 1992 . Three regional bank presidents, Kashkari, Logan, and Hammack, voted against the decision specifically because they wanted to remove the easing bias from the statement . They demanded language signaling the next move could be up, not down.

Many more participants agreed with them but did not formally dissent. "Many participants indicated that they would have preferred removing the language from the post-meeting statement that suggested an easing bias" . The statement stayed. The internal consensus had already moved past it.

🔹 Labor Market Held Steady
Participants observed that the unemployment rate had been little changed in recent months and generally expected labor market conditions to remain stable in the near term . The headline numbers do not suggest imminent weakness.

Beneath the surface, however, some participants pointed to signs of softness. Job growth concentrated in only a few sectors. Survey measures of job availability declined. Most participants judged that risks to the employment side of the dual mandate were tilted to the downside . Stability with fragility underneath was the assessment.

🔹 Energy And Tariffs Are The Fuel
Almost all participants noted the risk that the Middle East conflict could persist or that oil and commodity prices could remain elevated even after the conflict ends . Participants observed that overall inflation had moved up, in part because of recent global energy price increases .

On tariffs, participants generally expected the effects on core goods inflation would diminish over the year. Then the minutes noted the counter: tariff rates could be increased above present levels, leading to additional upward pressure on inflation .

Some participants expressed concerns about a scenario in which sustained elevated energy prices, combined with the effects of tariffs, could embed inflation more broadly and potentially de-anchor inflation expectations . This is the worst-case scenario the Fed is now actively gaming.

🔹 Rate Cuts Got Conditions. Rate Hikes Got A Trigger.
Several participants indicated rate reductions would be warranted later this year if the conflict resolves soon and tariff and energy price effects dissipate . That is the conditional path.

The unconditional path is the majority view: inflation running persistently above 2% makes policy firming appropriate . The bar for cuts is high and specific. The bar for hikes is simply inflation staying where it already is.

🔹 The Warsh Inheritance
Kevin Warsh chairs his first FOMC meeting June 16-17. He inherits a committee where the majority already supports the direction he is expected to take. "Rate hikes are back on the table. The committee is getting more hawkish as Kevin Warsh joins," said David Russell, global head of market strategy at TradeStation .

The April meeting was Powell's last. The minutes confirm the dovish era died before he walked out the door.

Bottom Line
The #FOMC minutes revealed a majority ready to hike if inflation persists. Labor markets are stable but fragile. Energy prices and tariffs are feeding inflation from multiple directions. Three officials formally dissented to demand a hawkish statement. Many more agreed silently. Rate cuts require a ceasefire and fading tariff effects. Rate hikes require inflation staying above 2%, which it already is.

The Fed's internal compass has turned. The minutes prove it.

Friends, with the #Fed majority now openly discussing hikes, does your crypto portfolio prepare for tighter money or bet that the Iran conflict resolves before June?