Sonia Meskin, the U.S. economist at Standard Chartered, suggests that the July FOMC minutes were noncommittal regarding future rate cuts, which Standard Chartered analysts believe is largely due to a relatively quick stabilization of financial markets following volatility in the first week of August.

• “We note that members who opposed the July rate cut viewed international trade risks as having diminished over the intermeeting period. We believe trade tensions have re-escalated since. We see two more 25bps cuts in 2019.
• The minutes also included a discussion of money-market dynamics, but no clear guidance on the potential for and timing of a standing repo facility. We believe that the FOMC expects lower rates, the ability to widen the fed funds target rate-interest on excess reserves (FFTR-IOER) band at least once more, and a likely expansion of the balance sheet later this year to help alleviate pressures in the repo and fed funds markets.
• The minutes laid out three reasons for July’s 25bps rate cut, in the following order:

1. Deceleration in business investment and manufacturing, domestically and globally
2. Prudent risk management, given the limited policy space of foreign authorities
3. Concerns about the inflation outlook and inflation expectations.

• Importantly for the policy outlook, the minutes validated a pre-emptive approach to monetary policy. Many participants noted that an improved understanding of asset purchases and forward guidance justifies using these tools “more confidently and pre-emptively” in the future. This is consistent with market pricing of a prolonged period of relatively low rates.”