PU Prime App

Exclusive deals on mobile

  • Market Insights  >  Weekly Outlook

18 August 2022,03:31

Weekly Outlook

FOMC Minutes Reveals Fed’s Inflation Fears

18 August 2022, 03:31

Share on:
Share on:

On Wednesday, 17 August (GMT+3), the Federal Open Market Committee (FOMC) released the minutes for its 26-27 July meeting. In it, the Fed has finally decided to take a step back to assess the effects of aggressive monetary tightening. For the past few rate hikes, which saw increases as high as 75 points, the Fed has always defended its decision by pointing out the robustness of the US jobs market. With the outsized Nonfarm Payrolls for July – 528K vs a forecasted 250K – the Fed continues to be proven right about the jobs market.

Fed Chair Jerome Powell has said during the minutes that “it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation.” Similarly, the minutes also showed that some Fed members have expressed concern about over-aggressive rate hikes, and that moves should be based more on data instead of forward guidance. 

In other words, the Fed looks like it will consider slowing down the pace of tightening based on ongoing numbers until inflation slows to its desired 2% level. 

While inflation measured by the CPI seems like it peaked in July, it is still 8.5% higher than a year ago. The fed’s preferred measure of inflation, the PCE, is up 6.8% year on year. 


With the Fed’s fears of over-hiking (and tipping the US into a recession) being firmly established, the markets have been cautious about making big moves. 

While major indices surged at the start of the announcement, most of them pared down subsequently and ended the day lower – with the S&P 500 down 0.72%. Volatility based on the VIX has also decreased, although it remains “significantly above pre-pandemic levels. 

Meanwhile, the greenback has edged up 0.14%, with the Dollar Index currently at the 106.6 level. This comes on the back of the push factor of a weakening pound and euro; and the pull factor of dovish guidance from the Fed. 

Gold meanwhile, fell to the $1760 level briefly after the minutes, but has since climbed back to the $1765 level. 

In the money markets, traders are almost evenly split between betting on a 50-point and 75-point hike in the Fed’s September meeting. 

Investors are advised to pay close attention to the upcoming US Initial Jobless Claims figures, which will be released on 18 August, 15:30 (GMT+3) – which will give further clues on the development of the US jobs market. As a  friendly reminder, do keep an eye on market changes, control your positions, and manage your risk well.

Starten Sie mit einem Vorteil in das Trading

Traden Sie Forex, Indizes, Metalle und mehr zu branchenweit niedrigen Spreads und mit blitzschneller Ausführung.

  • Beginnen Sie mit Einzahlungen ab nur $ 50 auf unsere Standardkonten mit dem Trading.
  • Erhalten Sie Zugang zum 24/7-Support.
  • Sie haben Zugang zu Hunderten von Instrumenten, kostenlosen Schulungsmaterialien und einigen der besten Promotionen, die es gibt.
Jetzt registrieren

Latest Posts

Schnelle und einfache Kontoeröffnung

Live-Konto erstellen
  • 1

    Registrieren Sie sich

    Registrieren Sie sich für ein PU Prime Live-Konto mit unserem unkomplizierten Verfahren

  • 2

    Zahlen Sie Geld ein

    Zahlen Sie bequem über verschiedene Kanäle und in verschiedenen Währungen auf Ihr Konto ein

  • 3

    Beginnen Sie mit dem Trading

    Erhalten Sie Zugang zu Hunderten von Instrumenten zu marktführenden Tradingbedingungen

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!