• The Minutes of the Fed’s June 11-12 policy meeting will be published on Wednesday.
• Details of Jerome Powell and Co’s hawkish hold and their inflation outlook will be scrutinized.
• Markets wager a roughly 67% chance of a Fed interest-rate cut in September.

The Minutes of the US Federal Reserve (Fed) June 11-12 monetary policy meeting will be published on Wednesday at 18:00 GMT. Investors will scout for details into the Fed’s hawkish hold and policymakers’ outlook on inflation to gauge the timing of the expected interest rate cut this year.

Jerome Powell admits disinflation progress, a September cut likely?

The Fed maintained its monetary policy settings for the seventh consecutive meeting in June, as widely expected. In its policy statement, the US central bank said that “while inflation has slowed recently and the jobs market has become more balanced this year, the uncertain economic outlook keeps the Fed “highlight attentive to inflation risks”.”

“Summary of Economic Projections (SEP), the so-called Dot Plot, broadly met expectations with a higher inflation forecast for 2024 and less easing this year; The median FOMC member called for one 25 basis point cut by the end of this year and four 25 basis point cuts in 2025,” the policy statement read.

In the post-meeting press conference, Fed Chairman Jerome Powell noted that "we need further confidence, more good inflation readings but won't be specific about how many to start rate cuts. We'll also be looking at a balance of risks, and outlook as well." "Unexpected weakness in the labor market could also call for a response,” Powell explained.

Just a few hours before the Fed policy announcement, the US Bureau of Labor Statistics published the May inflation report. Data showed that the core Consumer Price Index (CPI) increased 0.2% on the month and 3.4% from a year ago, compared with respective estimates of 0.3% and 3.5%.

Since the May inflation report and the June policy announcement, several Fed policymakers remained wary about the inflation outlook, suggesting that the rates could stay ‘higher for longer’.

However, dovish Fed bets returned on the table after data on June 28 showed that the core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure, rose at an annual pace of 2.6% in May after advancing 2.7% a month before. May's inflation readings were in line with economists' expectations.