China Gold Network reported on August 19 that economists said investors who are looking forward to the minutes of the Federal Reserve's (FED) July meeting clearly release a signal of a chance to raise interest rates may be disappointed. "The Fed may point to a rate hike, but I don't see many signs about the need for a rate hike in September," said Josh Shapiro, chief economist at
MFR. Shapiro said the Fed would not put itself in trouble.
Shapiro said: "There are still a lot of things that may still happen before the Fed's September meeting."
Federal meeting minutes are about to be released, and may be vague about the timing of interest rate hikes
Moodys Analytics' real-time economy director Ryan Sweet believes that the minutes may be vague about the timing of interest rate hikes. He pointed out that since China has depreciated the RMB, the minutes of the Federal Reserve meeting are a bit outdated.
At the meeting at the end of July, the Federal Reserve said that starting a rate hike cycle only requires "slight" progress in the labor market. The Fed is also confident that inflation will move towards its annual target of 2%. At 02:00 on August 20, Beijing time, the Federal Reserve will release the minutes of the July meeting.
Since the Fed's meeting in late July, Atlanta Fed Chairman Dennis Lockhart said he supports a rate hike in September unless the economy is weak. Lockhart is a non-ideological centrist, and his remarks are an important weather vane for the Federal Reserve.
Laura Rosner, chief economist at BNP Paribas, believes that the minutes of the meeting are expected to show varying degrees of confidence in the inflation outlook.
Economists pointed out that in last week's interview, Fed Vice Chairman Stanley Fischer was concerned about the lack of inflation.
In view of Fisher's remarks, economists from the Bank of France said they will assess whether the Fed's inflation outlook estimates have worsened. Rosner said she has been cutting her inflation outlook due to falling energy prices.
Economists believe U.S. inflation may be moderate in July after a strong rise in June. A survey by
MarketWatch showed that economists expect overall U.S. inflation will rise by 0.2% in July, less than 0.3% in June; core inflation will rise slightly by 0.1% in July, up 0.2% in June.
On Wednesday (August 19) 20:30, Beijing time, the U.S. Department of Labor will release CPI data.
Although the Fed meeting took place before the yuan announced a depreciation, economists said minutes could provide the Fed's view on the depreciation of the yuan. Michael Gregory, deputy chief economist at BMO Capital Markets, said that the Fed will not be easily shaken by the strengthening of the US dollar, but the depreciation of the RMB means that "after the first rate hike, the interest rate trend will be much smoother than we have experienced before."
Either way, economists think the Fed won't surprise the market in September, so they do look forward to certain tips, even if not in the Fed's minutes.
