Federal Open Market Committee (FOMC) officials were divided last month on the Federal Reserve’s interest rate increase decision, minutes from the group’s meeting showed Wednesday, APA reports quoting Anadolu Agency.
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The minutes of their July 26-27 meeting, released Wednesday, show that officials were encouraged by a rebound in job growth.
Most traders don’t think the Fed will move in September.
Meanwhile, New York Fed President William Dudley reportedly said in a Thursday speech the past two jobs reports “helped allay concerns that arose earlier this year that job growth was beginning to stall”.
“There’s not enough in there to convince people that the Fed is going to suddenly go into an aggressive mode that will allow a number of rate hikes”.
World stock markets largely retreated Wednesday, with all eyes on the Federal Reserve as it prepares to offer further clues as to the timing of the next USA rate rise.
“They saw little evidence that inflation was responding much to higher levels of resource utilization and suggested that the natural rate of unemployment, and the responsiveness of inflation to labor market conditions, may be lower than most current estimates”.
But the greenback retreated after investors gained a broader insight on the Fed’s policy stance, which has been a source of anxiety ever since the USA central bank delivered its first rate hike in nearly a decade in December, 2015.
Strong employment and a long-awaited return of middle-wage jobs suggest the labour market is tightening and the broader USA economy is on track, New York Fed President William Dudley said on Thursday, appearing to reinforce his more confident message on a possible interest-rate hike.
“Despite their willingness and desire to raise rates, they haven’t gotten cooperation from the economy yet”, said Bucky Hellwig, senior vice-president at BB&T Wealth Management in Birmingham, Alabama.
Major U.S. stock averages last traded about flat, slightly higher than before the minutes’ release.
Dudley’s comments also pulled the dollar from seven-week lows hit just after tame US inflation data.
The euro was 0.3 percent higher at US$1.1320, having hit a seven-week high of US$1.13285 while even the struggling British pound was trading well above US$1.30. That statement was perceived by some analysts that the central bank could increase rates next month.
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Yields on French and Italian bonds are also near record lows, although Portuguese debt bucked the trend: The yield on its 10-year note climbed to 2.982%.
