FOMC Minutes Show Inflation Remains Elevated Despite Stable Labor Market

The Federal Open Market Committee (FOMC) released its minutes from the July meeting, revealing that inflation remained elevated despite stable labor market conditions and continued economic growth.

Most participants supported keeping interest rates unchanged, but several favored a hike. Some officials believed higher rates would be necessary if inflation fails to decline, while others argued for an immediate hike to avoid further increases later.

The FOMC noted that price increases over the past year were broad-based across services and goods, with the economic outlook similar to one prepared for the June meeting but slightly weaker. Participants expected solid real GDP growth to continue in the near term, citing ongoing AI-related investment and household spending as supporting factors.

The US Dollar remains under selling pressure following the announcement, weighed by an early announcement from the United States (US) Treasury Department that it will increase the size of government debt repurchases by at least double. The US Dollar Index (DXY) trades around 98.90 after the FOMC Minutes.