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Minutes released by the Federal Reserve showed no mention of support for interest rate cuts, highlighting a clear shift in the central bank’s policy discussions over the past year. Early last year, markets had expected the Fed to lower borrowing costs this year as inflation eased. But inflation pressures have continued to build since the Trump administration joined Israel’s war against Iran, while oil and natural gas shipments through the strategically vital Strait of Hormuz remain constrained about six months after the conflict began.
With recent data showing slight signs of easing inflation and companies unexpectedly scaling back hiring in July, markets expect the Fed to leave its benchmark rate unchanged again at its Sept. 15–16 meeting. Against that backdrop, Fed officials are divided over whether further rate hikes are needed to curb inflation, while also taking a more cautious view of risks to labor-market strength and the goal of full employment. Fed Chair Wush has avoided commenting on the path of monetary policy during the remainder of the term, leaving markets without clear guidance from the central bank’s top official.