Re-upping MNI's June Fed Minutes preview, including key Fed commentary over the last 3 weeks (PDF here):
- FOMC commentary in the last three weeks has reinforced the main theme from the June meeting despite the more encouraging inflation data of late, policymakers are not in a rush to cut rates. In that regard, the key aspect to watch in the minutes to the June FOMC meeting (out Wednesday July 3 at 1400ET) is the Committee's take on the latest data and the degree to which such readings provide "confidence" for cutting rates.
- Chair Powell said at the June press conference that the Committee saw May's CPI "report as progress and as... building confidence, but we don't see ourselves as having the confidence that would warrant... beginning to loosen policy at this time."
- Powell confirmed that participants had the ability to change their projections after the CPI release, which came out on the 2nd day of the FOMC meeting, but said that while some did, most didn't. The minutes could shed some light as to what extent the data impacted deliberations.
- On the updated FOMC projections, which showed 15 of 19 Committee members split between 1 or 2 cuts for 2024 (recall, the median moved to 1 cut from 3 in March's SEP), Powell said participants' decisions between 1 vs 2 were "very close calls" and it will be interesting if the Minutes hint at just how close.
- By the same token, it could be of note if an increasing number of participants are eyeing possible hikes (the May minutes revealed "various participants mentioned a willingness to tighten policy further"). And whether there is any disagreement on the degree to which policy is sufficiently restrictive.
- Outside of FOMC participant commentary, since mid-June there haven’t been many notable macro developments that could steer the Fed’s path, with last week’s May PCE report largely in line with the previously-received CPI and PPI data. Friday’s nonfarm payrolls and next week’s Congressional testimony with Chair Powell are the next key events to watch.
