Minutes May Show Why Fed Kept Timing Vague on Next Rate Increase

When Federal Reserve policy makers met in late July, a brighter picture of the U.S. labor market had emerged, and the U.K. vote to leave the European Union passed without much damage in financial markets.

The most notable change to the Federal Open Market Committee’s statement after the July 26-27 gathering was a reassuring observation that “near-term risks to the economic outlook have diminished.” Still, a warning of a looming interest-rate increase wasn’t delivered.

Minutes of that meeting, to be released Wednesday, may help explain why Fed officials stood pat without signaling the timing of their next move. While the short-term picture looked rosier, mounting uncertainties about longer-run issues such as slower potential growth — discussed at length at the FOMC meeting in June — may have continued to temper the urge to tighten.

Bloomberg

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.