Fed minutes: Officials generally agreed that extent of further hikes less certain

• Participants 'generally agreed' that the extent to which further hikes may be appropriate was less certain
• Many participants focused on need to maintain optionality
• 'Several' said that if economy evolved along the lines of their outlooks, further hikes might not be needed
• Some participants said additional hikes would likely be needed
• Some stressed that it was crucial that policy not signal likelihood of cuts late this year or rule out further hikes
• Participants agreed that inflation was unacceptably high and declining slower than they had expected
• Staff continue to forecast a recession later this year followed by modestly-paced recovery

The minutes revealed that some participants commented on the likelihood of additional policy firming in future meetings, suggesting that further interest rate hikes might be warranted based on the evolving economic outlook. However, others noted that if the economy evolved as anticipated, additional policy tightening might not be necessary.

That's not a big surprise and the headline that catches my eye mostly is the bolded one as it indicates more of a bias towards hiking and towards keeping rates higher for longer. Plenty of that is baked into the US dollar US Dollar The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purel Read this Term but perhaps not enough.

Fed officials also expressed judgment that banking sector stress would likely weigh on economic activity, albeit to an uncertain extent. The potential impact of stressed financial institutions on the broader economy was a topic of discussion, highlighting the risks associated with potential disruptions in the financial system and tighter financial conditions.

"Participants noted that risks associated with the recent banking stress had led them to raise their already high assessment of uncertainty around their economic outlooks," the minutes said.

Several participants voiced worries about the timely raising of the federal debt limit, highlighting the potential for significant financial system disruptions and tighter financial conditions if the issue is not promptly addressed. Prompt resolution was emphasized to avoid adverse effects on the economy.