FOMC Minutes: "Over-Tightening" Surprises UBS; NWM Dismisses "Slow" (1/3)

Some analyst views on Wednesday's release of the July FOMC minutes:

• NatWest: The Minutes "should not materially alter expectations for a continued "unusually large" rate hike next month". One line seized on by the market as dovish - re "appropriate at some point to slow the pace of policy rate increases" - NatWest notes simply repeated one of Powell's post-meeting press conference responses.
• NatWest still looks for a 50bp hike in Sept, 25bp in Nov, 25bp in Dec, and 50bp in early 2023.
• UBS:"One of the more surprising lines to us was that "many" participants voiced concern about over-tightening...such widespread concern at this juncture, given how high inflation is, was new news."
• But there was "little clarity on what action to expect at the September FOMC meeting...We look at these minutes as consistent with a path toward a 50 bp rate hike ... with risks of 75 bps depending on the data to come."
• "In line with the mixed signals on the economy reflected in the discussion, the labor market was no exception....FOMC participants apparently [] see the discrepancy with their own internal translation of the ADP data. That suggests a labor market that may look more like the household survey than the payroll survey."