FINWIRES · TerminalLIVE
FINWIRES

Federal Reserve Watch for July 8: FOMC Minutes Show Large Disparity of Views on Future Policy Path

By

Minutes of the June 16-17 FOMC minutes showed considerable divisions among the participants regarding the path of monetary policy, most hinging on evolution of inflation.

Many participants expected the recent elevated inflation is due to temporary factors that will dissipate and could allow the FOMC to maintain or even lower the target range, which others suggested that inflation will remain elevated and require rate increases.

Recent comments of note:

(July 6) Fed Governor Christopher Waller (voter) said that forward guidance is useful in some cases, including as tool in place of actual rate actions, but requires flexibility when conditions evolve differently from was expected.

(July 1) Fed Chair Kevin Warsh (voter) repeated that the FOMC will work to maintain price stability and said that prices are too high but again avoided giving any forward guidance.

(June 26) Minneapolis Fed President Neel Kashkari (voter) said that he expects that rising inflation will necessitate a rate increase at some point this year.

Related Articles

International

Card Spending in New Zealand Largely Flat in June, ANZ Says

Card spending in New Zealand was largely flat in June, with just a slight 0.1% seasonally adjusted increase from the previous month, although annual growth rose by a full percentage point to 5.8%, ANZ said in a Monday report.Card spending in the hospitality sector fell 2.2% in June after rising 3.5% in the previous month, while housing durables also fell. Those declines were offset by a lift in tourism and recreation, services, and non-retail trades and goods, according to the report.Meanwhile, card spending on motor vehicles and fuel slid 0.9% month over month as fuel prices continued to retreat, with spending at fuel, charging, and service stations falling 1.2% in June.ANZ also reported "a sharp rise" in card spending on industrial supplies, but noted that this increase likely reflects higher prices as opposed to volume growth, as these goods are largely imported, and some of them are directly impacted by oil prices.

^NZ50
International

German Monthly Factory Orders Rise 1.9% in May

Germany's monthly factory orders gained 1.9% in May, following the revised 3.2% drop in April, according to preliminary data from the country's Federal Statistical Office published Monday.Analysts expected a 1.1% increase for the month.On a yearly basis, new orders in manufacturing were up 6.2%, against the revised 2.1% growth earlier.

^SXXP
International

Australian Card Activity Growth Softens Reflecting Lower Fuel Prices, Weakness in Non-Fuel Spending, Westpac Says

Australian card activity growth softened, reflecting a mixture of lower fuel prices and continued weakness in non-fuel spending, according to a Monday report by Westpac.The Westpac-DataX Card Tracker Index moved sideways through late May and most of June, declining sharply to 152.8 in the week that ended June 27, 2.3 points lower than a month ago.Quarterly growth momentum further slowed to 0.2% in the most recent week, down from the 0.5% a month ago. The implication is that some of the more recent softening in quarterly growth is due to a price-driven slowing in fuel spend.However, the monthly and weekly data suggest there has been a slight improvement in momentum since the start of June, likely reflecting some easing in budget pressures as fuel prices fell. The slight improvement in recent weeks centered on discretionary segments.The latest data suggest the June quarter is headed for a 0.2% quarter-over-quarter rise in nominal consumer-related card activity, pointing to a likely decline in real, inflation-adjusted terms.

ASX 200