FOMC minutes: a more robust discussion on inflation - Nomura

Ross J Burland FXStreet

Analysts at Nomura offered a review of the FOMC minutes.

Key Quotes:

"The minutes from the 19-20 September FOMC meeting contained a more robust discussion on inflation but relatively little new information, especially in light of the numerous public statements by FOMC members since the meeting. The language in the minutes was consistent with a December hike, although a small group of members expressed significant concerns over this year’s underperformance in inflation.

Regarding the next rate hike, the minutes described three camps on a December rate hike: "many" expecting a rate hike this year if the "medium" term outlook remain unchanged; "several others" conditioning a December rate hike on the degree of their "confidence" in the inflation outlook; and "a few" arguing to wait for confirmation that inflation is "clearly" on a path towards 2%. Altogether, the distribution of views is consistent with an additional rate hike in December. However, the “several other” group could lean towards the dovish camp that a December hike should be deferred for a while if inflation data comes in weaker than expected before the December FOMC meeting. Although we maintain our call for a December rate hike, we note that a high degree of uncertainty remains."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD holds losses below 1.3550 after weak UK jobs data

GBP/USD holds losses below 1.3550 in European trading hours on Tuesday. The UK ILO Unemployment Rate held steady at 4.9% in the three months to June, against a forecast of 4.8%, while Employment Change arrived at 83K in the same period versus 147K previous. Weak UK labor data keep the British Pound under pressure, driving the pair lower.

EUR/USD stays below 1.1600 despite upbeat sentiment data

EUR/USD struggles to gain traction and trades below 1.1600 in the European session on Tuesday, even after the data from the Eurozone and Germany highlighted improving economic sentiment in August. The US Dollar (USD) benefits from the risk-averse market atmosphere as tensions in Middle East remain high, making it difficult for the pair to turn north.

Gold sticks to losses below $4,400 as USD recovers further from two-month low

Gold remains depressed below the $4,400 mark through the first half of the European session, snapping a two-day winning streak amid a broadly firmer US Dollar. Inflation risks stemming from higher oil prices back the case for at least one interest rate hike by the US Federal Reserve in 2026.

Pi Network holds steady amid app studio costs surge to push user adoption

Pi Network extends a consolidation range capped below $0.0900 holding above the $0.0839 support level. PI token remains under pressure as the Core Team pushes for real user adoption by raising costs for AI-powered app creation, effective from August 24. Leverage-linked risk exposure eases as Open Interest declines despite an increase in social interest.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.