Aila Mihr, senior analyst at Danske Bank, explains that Minutes from the June meeting revealed that the Fed was already leaning towards easing, as many FOMC members saw a stronger case for a cut.

“The testimony from Fed Chairman Powell all but confirmed that the next move from the Fed is an easing of monetary policy. During his hearing, Powell stressed that uncertainty since the June meeting continued to dim the outlook for the US economy and that trade war risks overshadow the healthy labour market. On the back of the dovish language, markets started to reprice the probability of a 50bp cut at the end of the month (now back up at 25%). We stick to our view of a 25bp cut at the July meeting.”