FOMC Minutes Signal Further Tightening if Inflation Stays High at 3.5%-3.75%

3 articles · Updated · XTB · Aug 20

Many Fed policymakers said additional tightening would likely be needed if inflation fails to ease, according to minutes from the July meeting that left rates unchanged.
Core inflation indicators were described as worryingly high, and inflation expectations have climbed above levels seen before the Iran war, even as the committee stayed split on how persistent price pressures will be.
July hold supporters argued a pause would buy time to assess conditions, and weaker labor data plus slightly softer inflation readings since that meeting have strengthened their case.
Rate-hike backers countered that moving earlier could reduce the need for deeper, more economically costly tightening later, leaving markets focused next on weekly U.S. jobless claims and Friday PMI data.