Fed: Hawkish minutes keep upside rate risks – ING

FXStreet Insights Team FXStreet

ING strategists Michiel Tukker and Benjamin Schroeder note that the Federal Reserve’s June minutes confirmed a more hawkish stance despite an unchanged policy rate. They highlight that nine officials pencilled in higher rates by year-end and that most see further policy firming as likely if inflation stays elevated due to AI-driven demand, high energy prices and tariffs, though ING’s base case expects moderation.

June minutes reinforce hawkish Fed stance

"This more upbeat take on the economy and the labour market was also reflected in the more hawkish stance of the Fed, which was just confirmed by the minutes of the June meeting."

"While voting unanimously to keep rates on hold, that meeting saw nine Fed officials pencilling in higher rates by the end of this year."

"Most officials agreed that “some policy firming would likely be warranted” in a scenario in which inflation remained elevated due to strong AI-driven demand, high energy prices and tariffs."

"This is not our base case for inflation, where we see more room for moderation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD trims losses, disputes 1.3400

GBP/USD retreats after reaching a three-week high above 1.3430 and puts the 1.3400 region to the test on Thursday. Although easing political uncertainty in the UK helps the quid limit its downside, escalating tensions in the Middle East support the Greenback, keeping Cable under scrutiny.

EUR/USD off highs, back to 1.1430

EUR/USD loses momentum after briefly climbing to the 1.1450 area earlier in the day, revisiting the 1.1430 region on Thursday. Escalating tensions in the Middle East fail to underpin the US Dollar, although a broad sense of caution continues to prevail among market participants.

Gold climbs to two-day peaks near $4,130

Gold stages a modest rebound on Thursday, setting aside a three-day losing streak and managing to surpass the $4,100 mark per troy ounce. However, steady geopolitical tensions have revived concerns over persistently high global inflation, reinforcing expectations of higher rates across the board and somewhat curtailing the yellow metal’s upside potential.

Bitcoin stalls as mixed ETF flows, renewed US-Iran tensions cap upside

Bitcoin trades at $63,000 on Thursday, recovering slightly after facing rejection near $64,000. Renewed geopolitical uncertainty has dampened risk appetite, limiting BTC upside potential.

Japan may be changing its Yen strategy, but markets don’t look scared

Japan may be changing its intervention playbook, but that might not be enough to rescue the battered Yen. With USD/JPY hovering at four-decade highs, the currency’s weakness is being driven less by speculative pressure and more by a powerful structural force: the wide US-Japan rate gap.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.