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“The May minutes reveal Fed officials to be resolutely on hold for “some time,” with transitory low inflation and fading downside risks,” note TD Securities analysts.

Key quotes

“However, that latter assessment included the expectation for a US-China trade deal. With talks having broken down, Fed commentary on the outlook could turn more cautious.”

“The minutes also identify a multi-quarter drop in inflation expectations as likely needed to get the FOMC to consider rate cuts, outside of a large adverse shock to the outlook “” suggesting the market is mispriced for a full cut this year.”