An account of the debate at the U.S. Federal Reserve’s July policy meeting, set to be published after two weeks of whiplash on Wall Street, will probably offer clues as to what would push the central bank to go big with tightening yet again in September.
Fed officials’ decision at their July 26 to 27 gathering to raise their benchmark interest rate by three quarters of a percentage point for a second straight month marked the fastest pace of tightening since the early 1980s. And since then, betting in financial markets on the size of the next move in September has swung between 50 and 75 basis points on reports alternately showing a stronger-than-expected labor market and inflation below forecasts.
The minutes, due out at 2 p.m. in Washington on Wednesday, probably won’t settle the matter. But they could indicate what kind of data Fed officials would need to see to favor another "unusually large” increase — which Chair Jerome Powell, at a press conference following the July meeting, said could be on the table for the Sept. 20 to 21 gathering as well.