Fed minutes released on 20 August show a majority of participants flagging inflation risk as greater than employment risk, while U.S. markets began the day lower before a partial recovery.
Key moves
- FOMC minutes highlight upside risk to inflation, citing tariff uncertainty and potential unanchored expectations.
- U.S. CPI year‑over‑year: headline 2.7%, core 3.1%; PPI year‑over‑year: headline 3.3%, core 3.7%.
- Nasdaq fell more than 400 points to a low, closing down 142.10 points (‑0.67%); S&P 500 closed at ‑0.24%; Dow Jones Industrial Average rose 0.04%.
- European indices mixed: FTSE 100 gained, DAX and FTSE MIB slipped.
- Yield curve: 2‑year Treasury down 0.04 basis points, 10‑year down 1.1 basis points; 20‑year auction yielded 4.876% on $16 billion sold.
- Political controversy: Bill Pulte tweeted accusations of mortgage fraud against Fed Governor Lisa Cook; President Trump urged her resignation, although no charges have been filed.
Summary
The day’s data reinforced a cautious stance on monetary policy, with the Fed’s own minutes underscoring inflationary pressure as the dominant concern. Markets reacted with a muted drop that narrowed by close, and the Treasury auction saw solid demand. Political chatter over a Fed governor’s alleged misconduct added volatility but did not shift the broader policy outlook.
(Source)
