The protocol of the Federal Reserve meeting on July 30 has been published.
Overall, the protocol has a slightly "hawkish" tone: inflation risks are in focus, and quick and aggressive rate cuts should not be expected. The BTC rate started a local correction on the news.
What is important for the markets:
- Interest Rate Size. Almost everyone is in favor of a pause. Two (Bowman, Waller) wanted a reduction of 0.25 percentage points. But this is no longer news.
- Inflation. Remains above the 2% target, new tariffs push prices up. Most members expect short-term inflation acceleration, long-term expectations remain "anchored".
- Labor Market. Unemployment is 4.1%, employment is close to "maximum", but demand for workers is cooling.
- Risks. The main one is the sustainability of inflation due to tariffs.
- Economy. GDP growth in the first half of the year is weak - it hampers consumption and housing investments. Some Federal Reserve members expect sluggish growth in the second half of the year.
- Financial Markets. Sentiments are optimistic (especially in the AI sector), but the Fed sees overheating and vulnerabilities in banks as yields rise.
- Federal Reserve Policy. The Fed is ready to respond to data without waiting for full clarity on the effects of tariffs. Quantitative tightening (QT) continues, and the liquidity of the banking system is currently excessive.
- Other:
-- Possible influence of the GENIUS Act on demand for bonds and the banking system has been noted.
-- Vulnerabilities noted in the hedge fund sector, stablecoins, and non-bank lenders, the need for monitoring has been stated.
We await Powell's speech (Jackson Hole, August 23) and the next data on consumer and producer inflation (this will be in September).
