Fed Minutes reading (7 PM BST)
- Federal Reserve officials said a gradual slowdown in US economic activity appeared to be happening.
- Fed still see growth below-trend, softer labor market as necessary to restoring economic balance.
- Most Fed bankers saw continued significant upside inflation risks. Most members point to risk of inflationary rally that could lead to further hikes
- Some Fed participants pointed about the risk of doing too much to fight inflation
- US labor market still very tight but labor demand cooled down
- Several members wanted to keep interest rates unchanged, but ended up agreeing with the broad consensus
- Fed members discussing risks to the economy and inflation indicated that cumulative monetary tightening could bring the economy into a larger slowdown
- Credit tightening may be more significant than expected. Further rate moves will depend on data
- Inflation is too high, more evidence of falling inflation needed
It's hard to assess the Fed minutes, the report showed a lot of dovish messages, but the main track further indicates a possible hike, given the sizable inflation risks. All voting members decided on a hike, but there were some among the broader FOMC who indicated rather that there was no need to continue hiking. In view of this, it can be seen that the FOMC members are opening a path for both a hike and for maintaining interest rates.
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Source: xStation5
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