FOMC Minutes: Some participants favored or could have favored 25 bps hike

<ul><li>Those favoring hike noted tight labor market, stronger economic momentum and little evidence of inflation on path to 2%</li><li>Fed staff saw mild recession likely to start later this year</li><li>Almost all participants jusuged it appropriate or acceptable to leave rates unchanged</li><li>A few participants noted potential for upward pressure on money market rates as Treasury increased bill issuance</li><li>Almost all participants stated that upside risks to inflation might become unanchored</li><li>The staff's inflation forecast was little revised relative to the previous projection with inflation at 3.0% this year, with core inflation at 3.7%</li><li>On balance, the staff saw the risks around the baseline inflation forecast as tilted to the upside</li><li>In 2025, both total and core PCE price inflation were expected to be close to 2 percent.</li><li><a href="https://www.federalreserve.gov/monetarypolicy/fomcminutes20230614.htm" target="_blank" rel="nofollow">Full text</a></li></ul><p>I don't see anything surprising or notable here. The initial reaction in markets has been almost nil.</p><p>Notable lines:</p><p>A few participants mentioned that while, overall, the household sector
still retained much of the excess savings it had accumulated during the
pandemic, there were signs that consumers were facing increasingly
tighter budget constraints, given high inflation and, especially for
low-income households, depleted savings.</p><p>a few participants noted that their District contacts reported less
difficulty in hiring and retaining workers, lower turnover rates, and
some layoffs. </p><p> a few participants pointed to upside risks to the outlook for housing
services inflation associated with near-record low inventories of homes
for sale, solid housing demand, and less-than-expected deceleration
recently in measures of rents for leases signed by new tenants</p>

This article was written by Adam Button at www.forexlive.com.