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FOMC minutes: Indicators of longer-term inflation expectations are little changed, on balance

The minutes from the Federal Reserve’s July 31-August 1 monetary policy meeting have been published, with key highlights found below.

Key highlights (via Reuters)

  • Labor market has continued to strengthen and that economic activity has been rising at a strong rate.
  • Escalating trade tensions between China and the United States prompted notable market moves, particularly in foreign exchange markets.
  • News on an agreement between the United States and the European Union to continue talks to resolve their trade disputes provided some support for global equity prices. 
  • Indicators of longer-term inflation expectations are little changed, on balance.
  • Trade policies could move in a direction that would have significant negative effects on economic growth. 
  • Participants observed that if a large-scale and prolonged dispute over trade policies developed, there would likely be adverse effects on business sentiment, investment spending, and employment. 
  • Further gradual increases in the target range for the federal funds rate will be consistent with the sustained expansion of economic activity, strong labor market conditions, and inflation objective.
  • Risks to the economic outlook appear roughly balanced.
  • The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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