Credit Agricole delves into the potential highlights and core messages that could be drawn from the upcoming FOMC minutes.

Key Points:

1. Calls for Increased Tightening:

   • The FOMC minutes might underline that several members are ardently advocating for further tightening. This could mirror the June dot plots and reinforce recent comments from hawkish members like Bowman, who foresee more than just one concluding hike.

2. Insight into Rate Hike Frequency:

   • The document might not shed significant light on whether the Federal Reserve has officially transitioned to a quarter-by-quarter rate hike strategy. Notably, based on US money market perspectives, a rate hike in November seems thrice as likely compared to one in September.

3. Recession Outlook:

   • The minutes may re-emphasize that the Federal Reserve staff no longer anticipates a US recession in the upcoming quarters. This stance aligns with the ongoing resilience displayed by US macro data.

4. US Economic Activity:

   • The minutes might highlight that the US economy continues to demonstrate robustness. This observation is backed by sturdy housing statistics and a potential recovery in industrial output after two consecutive months of downturn, suggesting sustained economic activity across the US.

Summary:

Credit Agricole anticipates that the FOMC minutes will emphasize calls for enhanced tightening, echoing the sentiments of some hawkish members. While clarity on the Federal Reserve's rate hike pattern might remain ambiguous, the minutes are expected to underline the strength and resilience of the US economy, downplaying concerns of a potential recession in the near future.