Investors await the Fed’s meeting minutes tonight at 22:00 (Dubai time). The minutes are expected to indicate the Fed’s reasoning for its higher-for-longer stance on interest rates, which are currently at a 20-year high within the range of 5.25%-5.50%.
Markets will also be searching for signals that may clarify when the Fed will begin rate-cutting, especially after core inflation slowed to 3.6% last week, its lowest level since 2021. Adding to the story, the pace of hiring in the US has slowed, with the economy adding only 175,000 jobs last month, raising concerns over a potential economic slowdown in the world’s biggest economy.
The minutes release is anticipated to significantly impact the markets. This influence will be especially pronounced when comparing the new data with previous Fed statements. Notably, the US dollar index has declined by 1.5% since the start of May, marking its first monthly decline this year. Meanwhile, US stock indices are hovering near all-time highs. As suggested by analysts, today's developments could either bolster the ongoing stock market rally or prompt a correction.
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