The minutes of the July US Federal Open Market Committee released yesterday show, at bottom, that the members are still in a wait-and-see mode with regard to the decision to start raising core interest rates.
Inflation is still the worry and the continuing collapse of oil prices must be adding to this state of affairs. The latest US Consumer Price Index figure, also released yesterday, showed, as expected, no change on the previous reading.
Bloomberg SNAFU causes disruption in thin market
Bloomberg, and all other economic news agencies, such as Reuters, are sent releases like the Fed minutes early but are subject to an embargo until the appointed time for publication. It now appears that someone in Bloomberg accidently put up a headline ahead of time on their website which read:
“Fed Officials in July Saw Rate Rise Conditions Approaching”.
Market watchers read this as meaning that interest rate rises were imminent, and bid up the US dollar as a result.
When, nearly a half-an-hour later, the full story appeared, it was obvious that the headline was, at the very least, out of context. The eventual posting on Bloomberg says:
“Federal Reserve officials said last month that while conditions for raising interest rates were approaching, they need more confidence inflation is moving toward their goal, according to meeting minutes that prompted investors to reduce bets for a September liftoff.
Most meeting participants “judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point,” according to minutes of the July 28-29 Federal Open Market Committee session, released Wednesday in
A headline on the minutes was inadvertently released by Bloomberg 24 minutes before a 2 p.m. embargo set by the Fed.”
This tells a considerably less hawkish story than the early headline would suggest, and the dollar promptly went into reverse.