Morning Brief: FOMC Minutes Flag Inflation Risks; U.S. Treasury Yields Ease, Bitcoin Touches $70,000

Core Snapshot

🏛️ Minutes from the Fed’s July policy meeting reveal heightened inflation concerns. Many policymakers left additional rate‑hike options open should inflation fail to cool.

📊 U.S. national debt has hit $40 trillion for the first time, putting fiscal sustainability under sharp market focus.

I. Market Outlook

Key Events

‑ 🏛️ FOMC minutes show elevated inflation worries, rate‑hike remains on the table: July meeting readouts show growing unease over persistent price pressures. Several policymakers favoured tighter policy, while many argued higher borrowing costs would be needed if inflation fails to converge toward the 2% target. The U.S. Treasury rolled out measures to support long‑dated bonds, which capped the recent yield surge. → 10‑year Treasury yield ‑5.1 bps at 4.655%; 30‑year yield ‑8.9 bps at 5.196%.

Exclusive View

The Treasury market has stabilized in the near term, yet the $40‑trillion debt milestone marks a critical fiscal threshold. Every 1‑percentage‑point rise in benchmark rates adds $400 billion to annual interest expenses. Minutes point to deep divisions within the Fed over inflation trajectories. A September rate hold remains the baseline scenario, contingent on no sharp oil price rally. Bitcoin’s move to $70,000 alongside gold’s strong rally prices in two forces: eroding marginal U.S. dollar credibility and rising geopolitical risk premiums. Digital assets are now firmly embedded in mainstream institutional portfolio allocations.

II. Overnight Market Performance

‑‑ US Equities: Dow Jones +0.22% at 53463.05; S&P 500 +0.21% at 7707.98; Nasdaq Composite +0.16% at 26331.09.

‑‑ European Equities: STOXX 600 ‑0.11% at 651.16. DAX ‑0.14%; CAC 40 ‑0.09%; FTSE 100 +0.14%.

‑‑ Fixed Income: 10‑year US Treasury ‑5.1 bps at 4.655%; 30‑year ‑8.9 bps at 5.196%; 2‑year +0.6 bps at 4.181%.

‑‑ Commodities: Sep WTI crude +1.05% at $85.83/bbl; Brent crude +0.66% at $91.62/bbl. COMEX Gold +2.83% at $4489.40/oz; Silver +2.80% at $65.734/oz.

‑‑ FX: US Dollar Index ‑0.72% at 98.93, lowest since late May. EUR/USD +0.78% at 1.1664, hitting more‑than‑two‑and‑a‑half‑month high.

‑‑ Crypto: Bitcoin touched the $70,000 mark; Ethereum broke above $2000 and peaked at $2333.90.

III. Macro News

1. 🏛️ FOMC Minutes: Inflation concerns mount, many policymakers keep hikes on the table

July meeting documents show greater discomfort with inflation. Some members backed immediate tightening, though broad consensus favoured holding rates steady assuming inflation prints match forecasts. The Fed reaffirmed its unwavering 2% inflation target and is not ready to declare victory over inflation.

Insight: Minutes back market expectations for a September pause, yet hawkish sentiment is building. A rate‑hike debate will resurface if August CPI or oil prices overshoot forecasts.

2. 📊 Treasury launches long‑bond support measures, yields pull back; national debt tops $40 trillion

The U.S. Treasury unveiled measures to stabilise long‑dated debt: it will buy back select long‑term Treasuries, cut long‑duration issuance share from roughly 25% to 20% in quarterly refunding, and boost short‑term bill supply. These actions have capped long‑end yield momentum; the 30‑year yield fell nearly 15 bps from its peak. U.S. total debt crossed the $40‑trillion threshold.

Insight: Bond buybacks paired with reduced long‑bond supply aim to contain long‑term rates. Even so, the $40‑trillion debt milestone signals mounting fiscal pressure ahead.

3. 🗣️ Trump confirmed he plans to meet Kim Jong‑un and stated North Korea possesses 57 nuclear warheads.

IV. Corporate News

1. 🏭 Samsung Electronics raised prices for high‑end foundry orders by up to 15%. Surging AI‑chip demand has shifted pricing power toward chip manufacturers.

2. 💰 SK Hynix announced a KRW 40‑trillion share buyback‑and‑cancellation programme, committing to return at least 50% of operating cash flow to shareholders. The world’s second‑largest memory chip firm rolled out a large‑scale shareholder return initiative.

3. 📉 Reports suggest OpenAI’s Q2 revenue growth slowed to only 18%, well behind Anthropic’s growth pace. Should the reports hold true, markets will need to reassess competitive dynamics among top‑tier AI application players.

V. Today’s Focus

· 📊 US Initial Jobless Claims: key gauge to assess labour‑market resilience.