When the Federal Reserve releases minutes from its June 14-15 meeting today, investors will get a deeper look at the central bank’s latest deliberations and economic analysis.
Rationale behind the Fed’s 0.75-percentage-point rate hike in June, which was the biggest since 1994, has been well telegraphed. Heading into the policy-setting meeting, the consumer price index made a fresh 40-year high and a separate report showed an alarming increase in consumers’ longer-term inflation expectations. The latter data point has since been revised lower, but inflation expectations remain well above the Fed’s 2% target. Central bankers have revealed increased concern over elevated inflation expectations because inflation psychology can become a self-fulfilling prophecy as expectations of higher future prices prompt consumers to pull forward spending.