Yesterday’s Federal Reserve Minutes in summary

USD

The dollar traded higher on Wednesday buoyed by its safe-haven status and the hawkish signals from Federal Reserve officials that an aggressive rate hiking policy will be required this year.

According to the Fed’s Minutes released yesterday, many policymakers were keen to raise interest rates in the US by 50 basis points last month but were deterred by the conflict in Ukraine. Rates were therefore increased by just 0.25%. The minutes also suggested that one or more 50 basis points hikes would be required this year on the basis that inflation levels remain high. As a result, money markets are now fully pricing in a 0.5% raise for next month.

In addition to this, the minutes confirmed that the Fed would look to taper its bond buying scheme of $9 trillion at a pace of $95 billion per month.

Key announcements

09:00 – EUR – Retail Sales (YoY) (Feb) expected to fall from 7.8 to 4.8