FOMC minutes response: “unsurprisingly hawkish”

  • FOMC minutes … unsurprisingly hawkish
  • Fed appears set on hiking the policy rate by either 50bps or 75bps at the upcoming meeting later this month
  • a restrictive policy stance was seen as warranted given the strength of inflation and tightness in the labour market
  • the minutes flagged the possibility of an “even more restrictive stance” if elevated inflation pressures were to persist
  • there was no sign in the minutes that the Fed is thinking of wavering from its strategy, even with a growth slowdown in train and equity markets in ‘bear market’ territory … participants “recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2% as critical to achieving maximum employment on a sustained basis.”

Daily USD index:

Daily USD index 07 July 2022
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