US Fed, ECB Minutes to Show Inflation Fears Amid Weakened Hike Bets

The US Federal Reserve and European Central Bank will release minutes of their September meetings this week, highlighting concerns about inflationary pressures.

Solid economic growth in the US has been bolstering the job market, allowing the Fed to focus on inflation. However, recent employment data showed lower-than-expected job creation and lackluster wage growth, adding evidence that the labor market isn't contributing to existing inflationary winds.

According to Bloomberg Economics, 'the hurdle for an October rate hike is now high.' Sticky services inflation could keep open the option of a December hike, but the Fed will likely need clearer evidence that price pressures have re-emerged before tightening again.