July FOMC Meeting Minutes Today

STOCK INDEX FUTURES

Stock index futures remain under pressure due to a hawkish Federal Reserve along with worries about the banking sector.

Housing starts in July were 1.452 million when 1.455 million were expected, and building permits in July were 1.442 million when 1.464 million were anticipated.

The 8:15 central time July industrial production report is anticipated to show a 0.3% increase, and July capacity utilization is predicted to be 79.1%.

The minutes from the July 26 Federal Open Market Committee meeting will be released at 1:00.

Futures are likely to work lower in advance of the release of the FOMC minutes.

CURRENCY FUTURES

The U.S. dollar index is slightly lower.

Gross domestic product in the euro zone expanded 0.3% in the second quarter confirming previous estimates. On a year-on-year basis the region’s economy expanded 0.6% as estimated.

Industrial production in the euro area increased by 0.5% month-over-month in June 2023, after a revised unchanged reading in May and better than market forecasts of a 0.1% decline.

U.K. house prices increased by least since July 2020 and declined in London.  British house prices increased by 1.7% in the 12 months to June. House prices in London fell by 0.6%.

The U.K. annual consumer price inflation rate slowed to 6.8% from June’s 7.9%, as predicted and moving further away from October’s peak of 11.1%.

INTEREST RATE MARKET FUTURES

The newest fundamental in recent days is some Federal Reserve officials are once again talking about the need for an additional fed funds rate hike.

Despite the recent more hawkish Federal Reserve, most market participants see the Federal Reserve leaving its fed funds rate unchanged when it meets next month.

Financial futures markets are predicting there is an 88% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 12% probability of a 25 basis point increase.

While Federal Reserve officials close in on the end of their tightening campaign, the debate is shifting from how high interest rates need to go to how long they should remain at elevated levels.

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