US Federal Reserve Minutes from 11-12 June meeting.
- The vast majority of participants at the Fed's June meeting assessed US economic growth appeared to be gradually cooling.
- A number of participants said policy should stand ready to respond to unexpected economic weakness.
- Several specifically emphasized further demand weakening could generate a larger unemployment response than in recent past
- Several participants said if inflation were to persist at the elevated level or rise further, the funds rate might need to be raised.
- Most Fed members saw current policy stance as restrictive. Bankers noted that unemployment may rise if demand weakens.
- Participants saw modest further progress toward the committee's 2% inflation objective in recent months.
- May's CPI reading was seen by participants as providing additional evidence of progress toward the inflation goal.
- A number of participants said policy should stand ready to respond to unexpected economic weakness.
- Fed await for more data to start cutting rates and see trade tensions and geopolitics as risky for inflation path. As for now, Fed members did not expect it would be appropriate to lower borrowing costs until “additional information had emerged to give them greater confidence” that inflation was moving toward their 2% goal
- Fed members see that inflation progress was evident in smaller monthly gains in the core PCE expenditures price index and supported by May consumer price data that were released hours before the rate decision
- Some officials emphasized the need for patience in allowing high rates to continue to restrain demand, while others noted that if inflation were to remain elevated or increase further, rates “might need to be raised”
- A “number” of FOMC members said the Fed needs to stand ready to respond to unexpected weakness, and several flagged that a further drop in demand may push up unemployment rather than just reduce job openings
On the US Dollar futures (USDIDX) we can see almost lack of any reaction to published today FOMC minutes. However, we can assume that with today, weaker than expected ISM data, June FOMC minutes may be seen quite dovish.
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Source: xStation5
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