Minutes from the Federal Reserve’s meeting on June 13-14 June showed that monetary policy members were split over the timing of shrinking the balance sheet. While some Fed officials want to kick off the process for reducing the holdings of treasuries and asset-backed securities in September, others want to see more clues on inflation, which has been edging lower.
The Bank of England (BoE) caught traders off-guard on Thursday, turning what was expected to be a rather mundane affair into something far more interesting, as two policy makers joined Kristin Forbes in voting for a rate hike.
We've expected a relatively flat open on Wall Street on Wednesday, as traders await the minutes from the FOMC meeting earlier this month, having already strongly priced in a rate hike in June, with a second in December looking less certain.
The New York Federal Reserve said on Friday it raised its outlook for U.S. economic growth in the second quarter, citing positive surprises from industrial production and capacity utilization data in April which helped offset last month’s drop in home construction.
In view of realized and expected labor market conditions and inflation, the FOMC decided to maintain the target range for the federal funds rate at 3/4 to 1%. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2% inflation.