All participants at the May 3-4 monetary policy meeting backed a 50 basis point rate hike this month to combat inflation, which they agreed had become a key threat to the economy’s performance and risked accelerating. without central bank action, the minutes showed.
Treasury bond yields were little changed after the minutes were released. 10-year returns, which hit 3-1/2-year highs this month, briefly hit six-week lows on Wednesday, after data showed new orders for U.S.-made capital goods rose less-than-expected in April.
The dollar index, which measures the dollar against a basket of similar currencies, fell slightly after the Fed minutes before rising 0.285% to 102.04.
The dollar hit a one-month low on Tuesday after European Central Bank chief Christine Lagarde signaled an end to negative rates in the euro zone in the third quarter, boosting the single currency.
But even though that propelled the euro to a one-month high of $1.0748 on Tuesday, fell 0.42% on Wednesday to $1.0690.
The member of the board of the ECB, Fabio Panettatook some of the steam out of the single currency when he warned of a so-called “normalization tantrum” (a negative reaction from markets) caused by bringing interest rates to “neutral” levels.
Source: Ambito
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