- The decision to hike 75 bps in July was unanimous
- Lower commodity prices need not negatively affect inflation
- Most of the tightening effect will be seen further down the road
- Fed members indicate that lowering consumption must play a key role in beating inflation
- The Fed expects the unemployment rate to rise in the second part of the year
- The Fed indicates that there may be slower hikes at some point
- Many Fed members indicate that there is a risk of tighter tightening than needed Interest rates will soon enter restrictive levels and will remain there for a long time
- US Rate Futures price in higher probability of 50 bps hike in September to nearly 60% following Fed Minutes
Overall, one does not see in these minutes the stronger hawkishness that the market was hoping for just a few hours ago. Of course, there is no clear indication in the minutes that the Fed will slow down its hikes, but on the other hand, one can see the appearance of preoccupation with high rates. The dollar is losing slightly after the decision, and Wall Street futures are rising. The market is now pricing in a greater chance of a 50bp hike than a 75bp hike. EURUSD rebounds after the release of the FOMC minutes. The tone is rather neutral with a slight dovish bias. Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.