FOMC Minutes Show Fed Sees Significant Progress On Inflation

On August 21, 2024, the Federal Reserve released the minutes of the FOMC meeting that was held on July 30-31, 2024.

According to the Minutes, participants believed that the current stance of monetary policy was restrictive and would put downward pressure on economic actvity and inflation. As a result, they noted that Fed’s employment and inflation goals were moving into better balance.

The Minutes showed that total PCE inflation was near the 2% target at an annual rate, while core PCE inflation was just below 2%. The participants “expected core nonhousing services inflation to gradually decline further as the labor market continued to move into better balance and wage growth moderated further.”

Overall, the Minutes were dovish and showed that Fed was ready to start the rate cut cycle, in line with analyst expectations.

U.S. Dollar Index tested session lows as traders reacted to FOMC Minutes. Currently, U.S. Dollar Index is trying to settle below the 101.00 level. Treasury yields continue to move lower, which is bearish for the American currency.

Gold climbed towards the $2520 level as traders focused on falling Treasury yields and weaker dollar.

SP500 settled near the 5620 level. Stock traders stay bullish as they prepare for the start of the Fed rate cut cycle.

For a look at all of today’s economic events, check out our economic calendar.