Fed officials looked past last Friday’s better-than-expected US jobs data and affirmed the two cuts pencilled in previous month’s Summary of Economic Projections, DBS’ FX strategist Philip Wee notes.

Fed Minutes are on their way

“Today’s FOMC Minutes should echo New York Fed President John Williams’ confidence that inflation was moving towards the 2% target because the US economy and the labour market were getting back in balance, allowing interest rates to move towards a neutral setting.”

“Minneapolis Fed President Neel Kashkari estimated the neutral rate to be close to 3%, where we see the Fed Funds Rate falling to next year from today’s 5%.”