FOMC minutes: main points
FXBAZOOKA.com - The more hawkish minutes of the Fed’s July meeting released yesterday made traders increase bets the central bank will raise interest rates next year.
- FOMC members saw labor-market progress and increases in inflation accelerating in a manner that was bringing conditions closer to normal or to those before the financial crisis.
- “Many participants noted that if convergence toward the committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated”.
There was no discussion of the timing of a rate increase in the minutes. Still, analysts at Commonwealth Foreign Exchange say that although it’s “too early to suggest rates may rise sooner than expected, the consensus view of the Fed is shifting to the center, part of the process of the Fed normalizing its stance, which is fundamentally positive for USD.”
Investors are now looking forward to the Jackson Hole symposium of global central bankers, where the Fed’s Chair Janet Yellen will speak on Friday.