(Bloomberg) -- In June, the Federal Reserve hiked rates for the third time in its past five meetings and maintained plans to deliver another increase by the end of 2017. With the release Wednesday of minutes from that meeting, we'll see how concerned Fed officials are about sluggish price growth and perhaps glean clues on the timing of balance sheet normalization.
May's minutes showed that most participants viewed the slowdown in inflation as transitory. The balance of opinion may be shifting, however, in light of data released the same day as the Fed's June meeting which marked the third straight month of surprisingly soft price pressures. Dallas Federal Reserve President Robert Kaplan has said he wants to see more progress in moving towards the 2 percent inflation goal before lifting rates again.
Along with the June hike, the Federal Reserve also provided an updated blueprint on how they plan to slim their massive asset holdings. These minutes offer information on how soon this process may begin, and whether officials plan to take a break from lifting interest rates to see how markets and the economy react to this form of policy normalization.
In addition, any central bank commentary on financial conditions will be closely watched. Recently, a host of monetary policymakers have warned on equity valuations, with San Francisco Fed President John Williams going as far as saying the stock market "seems to be running very much on fumes."
Odds of an additional rate hike by year-end are currently slightly above 50 percent.
Follow along as we annotate their discussion.
https://twomargins.com/c/FED-MINUTES-JUNE-hvbjlg
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net.
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