US Dollar: FOMC minutes to highlight hawkish debate – TD Securities

TD Securities strategists preview the June Federal Open Market Committee (FOMC) Minutes, expecting more insight into the policy debate than provided by Chair Warsh’s press conference. They highlight internal disagreement over whether policy is sufficiently restrictive as inflation risks rise, with many officials seeing scope for both hikes and a pause, and most potentially favoring renewed tightening if inflation continues to surprise higher.

Minutes to reveal policy divisions

"The June FOMC minutes may reveal more about the policy debate than Chair Warsh did at his press conference."

"The apparent "family fight" likely focused on whether policy was restrictive enough given rising inflation risks."

"While "many" participants likely saw a case for both hikes and holding steady this year, the Committee's recent hawkish tilt suggests "most" could have favored renewed tightening if inflation continues to surprise to the upside."

"There is also a risk the minutes provide limited detail, reflecting both the shorter post-meeting statement and Chair Warsh's efforts to curb forward guidance."