Minutes of the September Federal Reserve meeting: Most officials prefer to raise interest rates again before the end of the year After reading the minutes of the September meeting, the Federal Reserve's concern about inflation remains evident. In September, a 12-0 unanimous vote was passed to raise interest rates by 25 basis points, bringing them to 3.75% to 4%. However, most attendees at the time believed that another rate hike might be needed before the end of the year. The support behind this judgment is that the US economy still has resilience, employment has not significantly weakened, and inflation has not made sufficient progress. According to the description in the minutes, the unemployment rate was 4.1% in both July and August, with an acceleration in job creation in August. Consumption and corporate investment are also supporting the economy. That is to say, what the Federal Reserve saw at the time was that the economy could still withstand higher interest rates and there was no immediate pressure to relax due to a significant decline in employment. This allows them to focus more on inflation, as employment risks are relatively balanced while inflation risks still tend to be upward. The minutes repeatedly mention that AI investment is supporting corporate investment and profitability, while also increasing cost pressures on some goods, raw materials, and related labor. Construction and procurement will first generate demand, and there is still great uncertainty about how much production efficiency can be improved and when it will be reflected. Some officials are concerned that demand may exceed supply during this period, continuing to push up prices. Combined with the rise in energy prices, if companies transfer the increased costs to consumers, the decline in inflation will be slower. Another detail that is easily overlooked here is the change in inflation statistics methods. The staff estimated during the meeting that the core PCE in August was 3.4% year-on-year, and if the new method to be implemented at that time was adopted, the estimated value would drop to 3.2%. In the same month, simply changing the statistical method will result in differences in the numbers. Although US bond yields have risen, many officials believe that overall financial conditions are still supporting economic growth. The stock market is rising, corporate bond spreads are narrow, and financing for large enterprises is still relatively smooth. Several attendees even believed that the policy interest rates at that time did not significantly suppress the economy, or the degree of suppression was very mild. For them, determining whether the interest rate is high enough depends on whether the expenditures of businesses and residents have truly slowed down. This can also help understand why some companies in the US stock market can still perform relatively well despite rising interest rate pressure. The market report in the minutes suggests that this year's stock price increase is driven by actual profits and profit expectations, while the price to earnings ratio has actually decreased. Enterprises earn more and can withstand some valuation pressure, especially those that directly benefit from AI investment. But this support varies by industry and is difficult to simply generalize to all risk assets. For Bitcoin: native, if the expectation of further interest rate hikes raises the returns on holding cash and short-term bonds, it will also increase the return requirements for fund allocation of Bitcoin. One @ Gate, trade more markets