With a new chair of the US Federal Reserve in place and inflation fears on the rise, investors will be closely watching Wednesday’s release of minutes from the central bank’s April Open Market Committee meeting.
While Fed officials held their benchmark interest rate steady at the meeting, the decision drew four dissents, with three regional Fed presidents saying they did not support signalling a bias towards cutting rates in future.
Data this week showed US inflation jumped to 3.8 per cent in April, higher than expected, from 3.3 per cent in March. Traders in futures markets have since fully priced in an interest rate rise by March next year, with more than a 50 per cent chance that rates will rise this year. At the start of the week, they were split roughly equally on whether rates would rise over the next 12 months.