FOMC minutes - key points
Looking at some of the key points in the minutes, the FOMC notes a mixed picture of the economy, with the readings on the labour market and the overall economy still strong. However, Fed policymakers did see the emergence of weakness in investment, factory output and exports, showing concern over risks associated with trade tensions, geopolitics and the global economy.
The Fed also noted that several models highlighted an increased likelihood of a recession, but several policymakers favoured keeping rates steady as the uncertainties would not derail the expansion. Other reasons cited for keeping rates on hold was to ensure the Fed had room for manoeuvre should the economy require stronger stimulus, and they saw current market pricing for further accommodation as more than what policymakers deemed appropriate at the present time.
As we can see, the minutes offer a pretty balanced view, and if there is any takeaway, then we can assume that further rate cuts - on the basis of these discussions may be hard to come by. That said, we have had soft data through the recent ISM readings, so there is every chance that the more neutral-hawkish members may have softened their stance since the last meeting.
It has been a typically tame response from the USD, with the leading spot rates sticking to levels seen into the release. USD/JPY is still trying to push above 107.50 and hold above here, having early tested to a little over 107.60 before easing back.