The Federal Reserve's September meeting minutes, released Wednesday, kept a hawkish tone: most participants thought another interest-rate increase would likely be appropriate before year-end. Several judged policy to be only mildly restrictive at best, with nearly all seeing inflation risks tilted to the upside.
But the minutes set no timetable, and markets still overwhelmingly expect the Fed to hold at the October 27-28 meeting — futures priced only about a 19 percent chance of a quarter-point hike. The minutes also predate last week's softer inflation and employment figures, which could further cool hike expectations.
The Fed was united on September's hike but split on the rationale: some saw tighter policy as insurance against energy and supply shocks spreading through the economy, while others believed stronger demand alone justified a higher rate path. Asian markets pulled back overnight as bond-market volatility and the hawkish minutes weighed on sentiment. This is market news, not investment advice.
