The forecast in markets today was mostly cloudy with a chance of showers as markets are stuck in choppy summer sideways trading with a moody bias. Despite early gains, US indices were unable to hold in the positive and slipped below the breakeven line by the early lunch hour as volumes and activity remained depressed. Afternoon trading saw barely an uptick in excitement as indices bounced around in modest loss territory and ultimately closed on the lows after July FOMC minutes release that saw headlines run rampant with a more hawkish commentary that “*MOST FED OFFICIALS SAW ‘SIGNIFICANT’ UPSIDE RISKS TO INFLATION.” In reality, the minutes were a bit more measured than headlines would suggest. And to that end, the CME probability for the September meeting barely budged holding tight around 88% that are expecting the Fed to hold next month. Insert healthy debate and bringing it back to the hawks that Redburn Atlantic’s resident economist, Melissa Davies, continues to shout her belief that inflation will remain sticky in the 3-4% range, with rising energy prices a key driver, and that this will lead to two additional hikes (to 6%) yet ahead.
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