The minutes disappointed those who had bet that the Fed could be more hawkish, after New York Fed chief William Dudley said on Tuesday that the Fed could possibly raise U.S. interest rates as soon as September.
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Stocks in the USA are heading for a flat market open on Thursday, focusing on speeches by Federal Reserve (Fed) officials and the Philly Fed manufacturing index.
Towards 2100 GMT, the euro was at US$1.1354, up from US$1.1287, levels not seen since the fears created by Britain’s June vote to exit the European Union.
“The Fed could potentially move in December, but with uncertainty about US inflation and monetary conditions around the rest of the world, the pace will be extremely measured”, said Roger Bridges, chief global strategist for interest rates and currencies at Nikko Asset Management’s Australian unit in Sydney.
Dudley pointed to an improving job market and said he believes the economy will be better in general in the second half of the year.
San Francisco Fed President John Williams speaks on economic outlook in Anchorage, Alaska at 4:00 p.m. ET.
As an economist (I am chief economist at jobs site Indeed.com), I am looking beyond the next rate hike, which should come at some point this year.
Strong employment and a long-awaited return of middle-wage jobs suggest the labour market is tightening and the broader United States 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.
In the interview, Dudley said, “we are edging closer toward the point in time when it will be appropriate to raise rates further”. Esther George, president of the Kansas City Fed, dissented in favor of an immediate rate increase.
The committee has left rates unchanged since voting in December a year ago to raise them from near-zero levels, marking the first increase in almost a decade.
Investors will watch Fed Chairwoman Janet Yellen as she speaks at a monetary policy conference in Jackson Hole, Wyo., next Friday. If labor market conditions tightened so much that inflation pressures jumped, the Fed would have to respond with a more rapid series of rate hikes that could jeopardize the recovery.
Yet other members viewed labor markets as being at or close to maximum employment and expected inflation to rise.
Fed will keep an open mind: No, not an open mind for lowering interest rates, but for raising them.
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Regardless of what the Fed does, what drives long-term economic growth is productivity.
