Federal Reserve and European Central Bank policymakers are showing less urgency about raising interest rates after weak U.S. nonfarm payroll data and market turmoil in France. Minutes from last month’s meetings are due soon and are expected to show that both central banks remain concerned about inflation pressures. At the same time, the Fed’s September minutes may indicate that officials still expected one more rate hike before year-end. Recent data, however, suggests the labor market has not been pushing inflation higher, leaving the bar for an October move elevated. The update points to a policy backdrop in which inflation concerns remain in place, but the immediate pressure to tighten further has eased compared with earlier expectations.
Federal Reserve and European Central Bank policymakers have become less urgent about raising rates after weak U.S. nonfarm payroll data and market turmoil in France.
Both central banks are set to release minutes from last month’s meetings, which are expected to show concern about inflation pressures.
The Fed’s September minutes may also show that officials still expected one more rate hike before the end of the year. Recent data, however, indicates that the labor market has not been adding to inflation, leaving a high bar for a rate increase in October.
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