Fed minutes to indicate size of upcoming US interest rate hikes this Wednesday

Federal Reserve officials are convinced that they will continue to raise interest rates until inflation in the United States is under control, and the release on Wednesday of the minutes of the July 26-27 meeting could clarify the aggressiveness. that they will adopt.

The minutes, which will be published at 3:00 pm ET, could help clarify what would prompt Fed officials to adopt a third 0.75 percentage point increase at their Sept. get them to limit further increases to 0.5 point.

Data since the Fed’s last meeting showed annual consumer inflation eased in July to 8.5% from 9.1% a month earlier, a fact that led most investors to expect a 0.5-point rise in interest next month.

But July’s job and wage growth beat expectations, and a recent rally in the stock market and other financial indicators showed an economy that could still be “too hot” for the central bank’s comfort.

Fed Chair Jerome Powell, speaking to reporters after the monetary policy statement was released in late July, left open the possibility of another big rate hike or a slightly smaller one, and analysts will be looking in the minutes for hints about what could push the central bank in one direction or another

“The timing of the slowdown in interest rate hikes or the conditions that would allow for the slowdown were not specified by Powell. This opens the door to a broader discussion in the minutes,” Citi analysts wrote.

The minutes of each Fed’s monetary policy meeting are released three weeks after the decision and can often appear dated.

But for much of this year, Fed officials have been reshaping monetary policy at an exceptionally fast pace to combat the worst bout of inflation since the early 1980s, and the minutes have reflected that growing sense of urgency.