Stock Market Update

[BRIEFING.COM] The major averages faded off their prior levels after the FOMC minutes showed that many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year. The S&P 500 (+0.11%) is up about 7 points.

Participants noted that inflation had ticked higher and remained somewhat elevated, while economic activity continued to grow at a moderate pace. Job gains slowed and unemployment edged up, raising concerns about rising downside risks to the labor market. With that backdrop, many officials favored cutting rates, some were on the fence, and several opposed a reduction.

Further, participants urged a deliberate approach, noting that limited data and two-sided risks called for caution. Most agreed that shifting toward a more neutral stance would help prevent a sharper labor-market downturn, and with tariff effects on inflation appearing modest, many viewed some easing as appropriate to counter employment risks. At the same time, the FOMC warned that additional cuts, amid still-elevated inflation and only slow labor-market cooling, could risk entrenching inflation or signal wavering commitment to the 2 percent goal.

Overall, participants stressed the need to balance risks carefully and maintain well-anchored inflation expectations.

Treasury yields are narrowly higher compared to pre-minutes, with the yield on the 10-yr up less than one basis point at 4.117%.