The Fed Releases the Minutes from the June Meeting

The Federal Reserve just released the minutes from its last meeting. At that meeting, the Fed decided to raise interest rates by 0.75%.

In the minutes, the Fed acknowledged the need to raise rates at the next meeting, which is later this month, by either 0.5% or 0.75%.

The June meeting was interesting because the Fed was leaning towards a 0.50% hike. After the CPI report, the Fed changed its mind to 0.75%.

In the United States, near-term policy rate expectations shifted markedly toward the end of the period, particularly after the release of the May consumer price index (CPI) report. Ahead of the release of the report, market expectations reflected a broad consensus that there would be 50 basis point rate increases at both the June and July FOMC meetings. After the release of the higher-than-expected inflation data, policy-sensitive rates pointed instead to a considerable probability of 75 basis point moves at both the June and July meetings. The market-implied path of the federal funds rate moved higher at longer horizons as well. Market participants noted elevated uncertainty about the economic and monetary policy outlook.

For now, traders have high expectations for a 50-point increase in September.

Posted by on July 6th, 2022 at 2:22 pm


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