Link Securities| The minutes of the May Federal Open Market Committee (FOMC) meeting showed that its members were divided on the need for further increases in the benchmark interest rate. In this regard, it was said that, based on expectations of a slow return of inflation to 2%, a further firming of monetary policy at future meetings was likely to be warranted. In general, participants were unsure how much further tightening of monetary policy would be appropriate, while many stressed the need to maintain optionality, adapting their decisions to incoming macroeconomic data.
Finally, FOMC members’ forecasts point to a mild recession starting later this year, as bank credit and financial conditions are expected to tighten further.
