FOMC minutes confirm Fed’s priority to fight inflation; US job growth remains solid

The FOMC minutes released this week showed further evidence that the Feds are centered on containing inflation. Investors cheered this week, though fears of a recession linger.

FOMC policymakers judged that an increase of 50 or 75 basis points "would likely be appropriate at the next meeting" given the current economic outlook. They also "recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist." With the potential for the firmer policy to slow growth, Fed officials also removed language from the June policy statement that "indicated an expectation that appropriate policy would result in a return of inflation to 2% and a strong labor market."

Further, on Friday morning, U.S. job growth proved to remain solid. The hotter-than-expected labor market eases worries of an economic slowdown, but it complicates efforts to fight inflation. The U.S. economy added 372,000 jobs in June, a strong showing, and wages climbed 5.1 percent, a still-rapid pace as the Fed awaits slowdown. The jobs report suggests the Biden economy is not yet in a recession, though there are a number of measures that indicate a slowing economy, including: declining retail sales, consumer confidence, the housing market, start-up funding...

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