Stock Market Update

[BRIEFING.COM] The minutes for the July 30-31 FOMC meeting were highlighted by the Fed's comments that a rate cut was "plausible" at the meeting, suggesting a September cut was all but guaranteed. Recent trading has the S&P 500 (+0.42%) is in second place, having moved mostly sideways over the prior half hour. The minutes showed that financial conditions eased modestly over the intermeeting period, reflecting lower long-term interest rates and higher equity prices. The minutes also noted that the vast majority of participants observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.

Further, all participants supported maintaining the target range for the federal funds rate at 5.25 to 5.50 percent, although several observed that the recent progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision.

A majority of participants remarked that the risks to the employment goal had increased, and many participants noted that the risks to the inflation goal had decreased. Some participants noted the risk that a further gradual easing in labor market conditions could transition to a more serious deterioration. Many participants noted that reducing policy restraint too late or too little could risk unduly weakening economic activity or employment.

Yields dipped following the minutes, the yield on the benchmark 10-yr treasury note is now down about four basis point at 3.770%.