Fed maintains a hawkish stance as inflationary pressure remains high
August 17, 2023 10:21 am
The July Fed minutes highlighted the hawkish stance of the committee, citing the high inflationary pressure as the reason for the potential tightening. This implies that at least one more rate hike may occur this year, depending on the incoming US data.
According to the document, uncertainty regarding economic prospects remain because the monetary policy stance should be restrictive to bring inflation back to 2%. Some members even believe that rates need to be raised even higher, while several recommended leaving interest rates unchanged.
Talking about economic activity, the minutes stated that risks continue to become more balanced, but the macroeconomic consequences of the tightening of financial conditions since the beginning of the previous year may turn out to be more significant than assumed. As such, some members see growing two-sided risks in the economy, despite the hawkish tilt.
On the bright side, the minutes noted that there will be no recession in the US this year!
The material has been provided by InstaForex Company – www.instaforex.com
The July Fed minutes highlighted the hawkish stance of the committee, citing the high inflationary pressure as the reason for the potential tightening. This implies that at least one more rate hike may occur this year, depending on the incoming US data.
According to the document, uncertainty regarding economic prospects remain because the monetary policy stance should be restrictive to bring inflation back to 2%. Some members even believe that rates need to be raised even higher, while several recommended leaving interest rates unchanged.
Talking about economic activity, the minutes stated that risks continue to become more balanced, but the macroeconomic consequences of the tightening of financial conditions since the beginning of the previous year may turn out to be more significant than assumed. As such, some members see growing two-sided risks in the economy, despite the hawkish tilt.
On the bright side, the minutes noted that there will be no recession in the US this year!
The material has been provided by InstaForex Company – www.instaforex.com
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