USD sees little reaction to FOMC Minutes

Summary:
- FOMC Minutes did not show that rate cut discussion was held
- Discussion on bond portfolio maturity postponed for “some time”
- EURUSD barely moves in the aftermath of the release

Minutes from the FOMC meeting that took place on May 1 has just been released. Markets were primarily focused on whether US central bankers discussed possibility of cutting the main interest rate or not. The release showed that no such discussion took place. Below you can find key takeaways from Minutes:

  • Numerous Fed members consider inflation slowdown as transitory

  • Patient approach seems to be appropriate for “some time”

  • Some risks observed earlier in the year have moderated

  • If inflation does not improve over coming quarters expectations may anchor below Fed target and make it harder to achieve on sustainable basis over the long term

  • FOMC discussed implications of shortening bond portfolio maturity

  • Members agreed that decision on bond portfolio maturity does not need to be taken for “some time”

  • Some members think that hike may be appropriate in case economy develops as expected

As one can see Minutes barely showed anything new. Phrase “for some time” surfaced a few times and may hint that “patient approach” is here to stay for some time. Unsurprisingly, the US dollar saw little reaction to the release as barely anything was made more clear.

EURUSD seesaws after FOMC Minutes release. However, range of moves in the first 10 minutes after release did not exceed 0.1%. Source: xStation5

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