Home/Central banks/FX/Newsfeed

Minutes confirm Mid-Cycle Adjustment Stance by most

Share Print 0

The Minutes to last month’s Fed rate cut showed that a number of officials stressed the need for Fed flexibility, which should support the argument for the Fed to deliver another rate cut in September.  With most officials viewing the July cut as a mid-cycle adjustment, it will take further deterioration with the global outlook for them to commit to an easing cycle.  Inflation has seen recent upticks, but the overall longer-term trend has been downward and the risks of becoming Japan should keep the Fed committed to delivering further rate cuts.

The Fed will keep optionality on the table and we should see Fed Chair Powell’s keynote speech at Jackson Hole on Friday solidify a September rate cut and deliver weak commitment for more to come.

The bullish case for stocks remains intact and we could see many focusing on the fact that a couple of FOMC participants supported half-point cut.  The Minutes were a non-event and we should see sideways price action until Powell’s Jackson Hole keynote speech on Friday.  The Fed could very well correct their communication mistake at Jackson Hole, which would be welcomed holders of risky assets.  The markets are still pricing in four rate cuts over the next 12 months.

US stocks held onto their gains while the dollar remains mixed against its major trading partners.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.
, , , , , ,
Back to Top