Fed Minutes Signal Patience, Markets Await Powell at Jackson Hole

GLOBAL MOOD: Risk-Off
Drivers: US Tech Sell-Off, Fed Minutes, Jackson Hole

Global markets are in a cautious, risk-off mode as investors weigh mixed economic signals and geopolitical developments. Uncertainty around the Federal Reserve's upcoming policy moves, coupled with Trump’s public pressure on the central bank, has heightened caution. Investors are waiting for further clarity from the Fed’s Jackson Hole symposium before committing to higher-risk positions.

TODAY’S WATCHLIST
 - US Initial Jobless Claims
 - Fed Bostic Speech

THE BIG STORY
Minutes from the US Federal Reserve’s July 29-30 meeting showed that almost all policymakers supported keeping the federal funds rate unchanged at 4.25%-4.50%, with only Michelle Bowman and Christopher Waller dissenting in favor of a quarter-point cut to support a weakening job market. 

Their concerns followed weaker-than-expected July hiring, a rise in unemployment, and downward revisions to prior job gains, though inflation pressures persist due to tariffs. Markets are presently assigning an 85% probability to a rate cut in September, with investors anticipating that Federal Reserve Chair Jerome Powell's upcoming address at Jackson Hole on Friday will offer further guidance.  

Meanwhile, President Donald Trump called on Fed Governor Lisa Cook to resign over allegations related to her mortgages in Michigan and Georgia, intensifying efforts to influence the US central bank. Cook responded that she would not be bullied and is reviewing the claims to provide accurate information.

Data Spotlight
US crude oil inventories fell sharply by 6.014 million barrels in the week ended August 15, 2025, far exceeding market expectations of a 1.3-million-barrel decline, according to the EIA Petroleum Status Report. Stocks at Cushing, Oklahoma, delivery hub, however, rose by 419 thousand barrels. Among refined fuels, gasoline inventories dropped 2.72 million barrels, while distillate fuel stocks increased by 2.434 million barrels. The four-week average for jet fuel consumption rose to its highest level since 2019, reflecting sustained demand in the aviation sector.

Takeaway: US crude inventories fell sharply, driven by strong gasoline and jet fuel demand, signaling tightening supply amid sustained consumption.

WHAT HAPPENED OVERNIGHT

• US Stocks slip led by tech on government intervention concern
  
  • Nasdaq and S&P 500 fell as investors rotated out of tech and moved into less highly valued sectors.
  • Tech stocks, key drivers of Wall Street’s recovery since April, led the declines.
  • Concerns emerged over potential government intervention, with the Trump administration reportedly exploring equity stakes in chip firms like Intel, following revenue-sharing deals with Nvidia and AMD.

• US Treasury steady ahead of Jackson Hole, Fed minutes signal caution
  
  • The yield on the 10-year US Treasury was steady while the 2-year yield declined marginally post FOMC minutes.
  • FOMC minutes showed members view pro-inflationary risks as outweighing labor market slowdown concerns, noting tariffs could have delayed inflationary effects.

• US dollar dips amid Trump criticism, Fed minutes temper losses
  
  • US Dollar fell on Wednesday following US President Donald Trump's call for Fed Governor Lisa Cook to resign.
  • Losses were pared after Fed minutes indicated only two policymakers supported a rate cut last month.
  • The US dollar index slipped 0.13% to 98.20, while the euro rose 0.09% to $1.1657.

• Crude oil prices rise on unexpected US inventory draw
  
  • Brent crude prices climbed about 2% on Wednesday following a larger-than-expected weekly drop in US crude inventories.
  • Brent crude settled at $66.84 a barrel, up 1.6%, while WTI crude rose 1.4% to $63.21.
  • Investors remain focused on developments in Ukraine peace talks, with sanctions on Russian crude still in place.

Day’s Ledger

Economic Data:

• Euro August PMI Flash 
• Japan July Inflation Rate 
• UK August PMI Flash 
• US Initial Jobless Claims
• US August PMI Flash 

Corporate Actions:

• Earnings: Esaar India, Arigato Universe, Elegant Floriculture, Contech Software
• Covance Softsol to consider right issue 
• Filtron Engineers to consider fund raising 
• GMR Airports to consider fund raising 
• Ventura Textiles to consider fund raising

Policy Events:

• Fed Balance Sheet
• Fed Bostic Speech

Tickers to Watch

• ADANI group units raise offshore debt from global lenders
• COMPUTER AGE gets RBI nod to transfer online payments biz to arm
• Promoter to sell stake in INDIA CEMENTS via offer for sale
• RAILTEL wins two work orders worth over half a billion rupees
• SHREE CEMENT tax demand cut by income tax department
• TCS signs deal with Finland’s Kesko for AI-led retail transformation
• ULTRATECH board clears plan to sell stake in India Cements via OFS
• VEDANTA files detailed response to govt representation in NCLT
• INFOSYS gives 80% bonus to majority of employees for first quarter

MUST READ

• RBI’s October Call Hinges on Transmission, Tariffs and a Swing Voter
• Mukesh Ambani Plays Long Game as Jio Preps for Blockbuster IPO
• Online Gaming Bill: Lok Sabha passes legislation to ban online money games
• Core sector growth falls to 2% in July against 6.3% in same month last year
• Datanomics GST rate-cut move chases push akin to the Laffer curve
• India, Eurasian Economic Union ink terms of reference for trade pact talks
• Govt to fast track reduction of compliance burden: DPIIT addl secy
• Trump Considers Firing Fed Official After Accusation of Mortgage Fraud
• Sweden Central Bank Stands Pat, But Says It Could Cut Again This Year
• UK Inflation Gains Pace, Likely Keeping Bank of England From Fresh Rate Cuts
  
  

See you tomorrow with another edition of The Morning Edge.

Have a great trading day.

Growth Without Jobs, Wealth Without Equity: India Needs a Bold Course Correction

Jobs remain scarce, inequality widens, and private investment hesitates. With youth unemployment at 17% in urban India and rural incomes stagnating, the promise of a “demographic dividend” is slipping away.

Former Finance Secretary Arvind Mayaram argues that India needs a bold course correction. One that invests in jobs, equity, and dignity, not just headline GDP numbers.