1. Home
  2. Live Market Analysis
  3. The Fed’s Meeting Minutes Report is out with a Rather Hawkish Stance
The Fed’s Meeting Minutes Report is out with a Rather Hawkish Stance

US Dollar

The Fed’s Meeting Minutes report is finally out, giving indications on the regulator's stance. The market didn't get a clear signal whether the next rate hike will be 75 basis points or 50 basis points but it has so far priced in a 50 basis point hike. However, even though the next rate hike wasn't confirmed, the report did provide plenty of information on the Fed’s opinions on how to tackle inflation going forward, which is positive for traders.

The US Dollar Index increased in value yesterday evening after the release of the Fed’s Meeting Minutes but slightly declined during this morning’s Asian session. However, as we approached the opening of the European and UK trading sessions the index again rose to 106.81. This is the highest we have seen since late July of this year. Traders are watching closely to determine how the Dollar may react as we approach the 107.00 mark.

US Stocks

The US stock market saw some declines throughout yesterday’s trading session. All the major indices fell, with the NASDAQ seeing the largest decline at 1.21% and the DowJones seeing the smallest decline measuring 0.50%. Market participants may have potentially exited the market due to uncertainty regarding the Meeting Minutes and the monetary policy.

Oil Prices

It's been over 24 hours that oil has been under pressure, failing to maintain a bullish momentum when it forms. A lower price wave has been formed but the new OPEC Secretary General pulled out all the big guns to sway traders from believing the price will continue to decline. According to Mr Haitham, the level of supply is at high risk and the Chinese recession fears are being exaggerated. Both comments are positive for the price of oil if we follow traditional theories. Additionally, crude oil inventories also indicated a much lower supply (-7.1 million barrels).


The EUR/USD, similarly to the US Dollar Index, saw a strong movement in favor of the Dollar after the opening of the US trading session. This continued after the release of the Fed’s latest report. The price of the currency pair had mainly been moving sideways with smaller bullish and bearish trends throughout the past 3 weeks. And the price action seemed to always lose momentum at a recurring price, which created a larger price range measuring 130 PIPs.

However, the price has seen stronger trends since the 11th of August, with the price forming a bearish trend measuring 190 PIPs, and only minor retracements. This morning the price is declining again and trying to break out of the latest retracement. Traders are looking closely to see if the asset is able to break to a new low. Currently, the instrument remains below all major moving averages.

EURUSD - 18.08.2022.png EUR/USD 6-hour price chart on August 18th.

The latest development and most influential factor is likely to be the Fed’s latest meeting. After the latest inflation figures, some traders had hoped that the monetary policy may remain in the neutral or even drop to the supportive zone. However, the report has advised that the level of inflation is still extremely high and the Fed will remain hawkish as long as inflation is far above its target of 2%. It should also be noted that the Fed’s target may potentially rise temporarily to 3% in the near future.

Most of the Fed members have remained hawkish with all of the FOMC approving a rate hike of 75 basis points and some even supporting a restrictive monetary policy, which would mean that interest rates would need to continue rising. The report had indicated that the Fed bankers are open to pausing the policy if data allowed them to. In other words, inflation is still too high. However, no indication was given signaling a rate decline neither in 2022 nor in 2023.

In addition to monetary policy, the market was also influenced by other economic data. Poor July US Retail Sales data were released yesterday, showing zero dynamics instead of the expected growth of 0.1%. Also, the American Association of Mortgage Bankers said that the demand for loans is at its lowest level since 2000 as first-time buyers and growing families are not willing to pay higher rates. Major US companies have also advised that they are preparing for a recession. This may potentially be positive in the longer term as the recession would not shock the economy as it did in 2007. However, in the medium term, the uncertainty can trigger a lower confidence level. This would be negative for the stock market, but potentially positive for the Dollar and other safe-haven assets.

Key Takeaways:

  • The US Dollar Index increases as it is supported by the latest Fed Minutes.
  • The Fed confirms that a restrictive policy is likely to be necessary.
  • Crude oil refuses to climb even after bullish comments from the new OPEC head.
  • US stocks slightly decline for a second consecutive day.
  • Mortgages drop to the lowest level since 2000 and US companies prepare for recession.
IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Copyright © 2022 – All rights reserved.

NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.

Any trademarks appearing on this website are the property of their respective owners.

The NAGA Group AG is the holding company of various companies, such as NAGA GLOBAL LLC, NAGA MARKETS EUROPE LTD, NAGA Technology GmbH, NAGA Pay GmbH and has a close link with NAGAX Europe OÜ.

RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.

Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the top-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.

Restricted countries: NAGA Group AG does not provide services for the residents of certain countries, such as Afghanistan, Albania, American Samoa, Australia, Barbados, Belgium, British Virgin Islands, Burkina Faso, Cambodia, Canada (including Quebec), Cayman Islands, Central African Republic, Congo, Democratic People's Republic of Korea, Democratic Republic of the Congo, Gibraltar, Guam, Haiti, Iran, Iraq, Isle of Man, Israel, Jamaica, Jordan, Libyan Arab Jamahiriya, Mali, Monaco, Morocco, Myanmar, Nicaragua, Philippines, Russian Federation, San Marino, Senegal, Serbia, Somalia, South Sudan, Sri Lanka, Syrian Arab Republic, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, US Minor Islands, US Virgin Islands, USA, Vanuatu, Yemen, Zimbabwe.

Member of NAGA Group AG that is publicly listed in Frankfurt Stock Exchange.
close icon
By using this website, you agree to our cookie policy