FOMC Minutes Reveal Board's Divide: Majority Supports Further Rate Increases
Portfolio Pulse from Piero Cingari
The Federal Open Market Committee (FOMC) meeting minutes reveal a divide among members regarding future interest rate hikes. While most participants see significant upside risks to inflation, requiring further tightening of monetary policy, some favor leaving the target range for the federal funds rate unchanged. The minutes also noted downside risks to economic activity and upside risks to unemployment. Following the release of the minutes, the market slightly revised higher chances for a rate hike by November. The SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust (QQQ) initially declined but recovered losses, while the Invesco DB USD Index Bullish Fund ETF (UUP) spiked and then declined.
August 16, 2023 | 6:29 pm
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NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) spiked and then declined following the release of the FOMC minutes.
The release of the FOMC minutes led to a spike in UUP due to the increased chances of a rate hike, but it subsequently declined as the market adjusted to the news.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75
NEUTRAL IMPACT
The Invesco QQQ Trust (QQQ) followed a similar pattern to SPY, initially declining but recovering losses after the release of the FOMC minutes.
Like SPY, QQQ initially declined due to uncertainties surrounding future rate hikes, but managed to recover as the market adjusted to the news.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75
NEUTRAL IMPACT
The SPDR S&P 500 ETF Trust (SPY) initially declined but recovered losses following the release of the FOMC minutes.
The uncertainty surrounding future rate hikes initially led to a decline in SPY, but it managed to recover as the market adjusted to the news.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75