FOMC minutes: Some officials favored a 25bps hike at the June meeting

• Federal Reserve released the minutes from its June 13-14 meeting.
• The minutes showed some policymakers favored a rate hike, but went with a pause. 
• US Dollar pulls back modestly after the minutes. 

The Federal Open Market Committee (FOMC) released the minutes of its June meeting, triggering a limited reaction across financial markets. According to the document, some officials favored a rate hike at the meeting, but went along with a pause. The minutes showed a division among FOMC members. 

In June, the Federal Reserve (Fed) kept the interest rate unchanged at 5.00% - 5.25%, as expected. In the projections, members see more rate hikes before year-end. The minutes show that “almost all participants noted that in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate.”

“Most participants observed that uncertainty about the outlook for the economy and inflation remained elevated and that additional information would be valuable for considering the appropriate stance of monetary policy”, the minutes noted. 

Market reaction: 

The US Dollar Index dropped from weekly highs near 103.30 toward 103.20 following the release of the minutes. EUR/USD moved slightly off lows and USD/JPY remained around 144.50.