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July FOMC minutes viewed as slightly more hawkish by MUFG
MUFG’s AI analysis finds several participants backed a 25 basis point July hike, while it also flags that tariff pass-through is largely complete and likely keeps inflation pressure modest.
MUFG’s research team used an AI-driven textual analysis to assess the July FOMC minutes, concluding they were slightly more hawkish than expected, with support for further tightening linked to concerns about inflation persistence. According to FXStreet, the analysis pointed to broader endorsement for a July rate increase, noting that the minutes’ language included “several participants” favoring a 25 basis point hike, compared with “a few participants” in the prior June minutes. MUFG also said the minutes framed AI as a near term inflation risk, with some participants citing AI related investment boosting aggregate demand and contributing to broad price pressures. At the same time, the research highlighted a dovish tilt in the minutes through the discussion of tariff pass-through. FXStreet reports MUFG focused on the minutes’ view that the pass-through of past tariff increases into prices is largely complete, and that the effect of recently announced tariffs on measured inflation is likely modest. FXStreet added that major FX pairs and the broader US dollar trend saw little reaction, which MUFG linked to minutes largely reinforcing existing market pricing. The research also suggested a Treasury buyback announcement earlier in the session may have dominated attention, limiting any sustained move in currency markets despite the modest hawkish shift.