The meeting minutes of the US Federal Reserve and the European Central Bank will be released next week, and are expected to highlight inflation concerns.

Weak U.S. non-farm payrolls data and sharp turmoil in French financial markets have reduced the urgency for Federal Reserve and European Central Bank (ECB) policymakers to follow through on additional rate hikes at their respective meetings this month. Both central banks will release minutes from their September meetings in the coming days; at those sessions, they raised interest rates over concerns about rising inflation pressures. The Fed’s September meeting minutes are likely to show many policymakers were deeply worried about underlying price trends at the time, and projected at least one more rate hike before the end of the year. However, Friday’s non-farm payrolls figures showed job additions came in below expectations and wage growth remained sluggish, further indicating the labor market is not fueling current inflationary pressures. Earlier this week, government revisions to the Personal Consumption Expenditures (PCE) index revealed inflation has been running slightly lower than previously estimated this year. Economists say the bar for an October rate hike is now very high. Even if the minutes remind markets of the hawkish stances officials took in September, subsequent data has strengthened the case for patience. While services inflation may keep a December rate hike on the table, the Fed will likely need clearer evidence that price pressures are resurgent before raising rates again. (Jin10)