Fed minutes: what you need to know
The Federal Reserve has released the minutes from its 29-30 July meeting on monetary policy.
As with the minutes published by the Bank of England earlier today, there was a certain amount of dissent from some of those present regarding the key issue of interest rate rises.
From the release:
Some participants viewed the actual and expected progress towards the Committee's goals as sufficient to call for a relative prompt move toward reducing policy accommodation to avoid overshooting the Committee's unemployment and inflation objectives over the medium term.
Unlike the UK economy, which saw an unexpected drop in inflation this week, the Fed can be relaxed as the US rate shows signs of settling around the two per cent target.
Of course, the US central bank also has a mandate to oversee a revival in the labour market, and there too there has been improvement, despite slightly underwhelming figures last time around.
Here is a snippet on inflation:
Participants noted that inflation had moved somewhat closer to the Committee's 2 per cent longer-rub objective and generally saw risks of inflation running persistently below their objective as having diminished somewhat.
And on the positive state of the jobs market, which will be crucial in and rate-hike decision:
Participants generally agreed that both the recent improvement in the labor market conditions and the cumulative progress over the past year has been greater than anticipated and that labor market conditions had moved noticeably closer to those viewed as normal in the longer run.
The comment on the jobs trends was tempered by the "subdued rise" in wages. Sounds familiar.
There was a reaction in the bonds market, where both two-year and ten-year US bond yields rose by three basis points, to 0.46 per cent and 2.47 per cent respectively, reflecting a growing pressure to raise rates.