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Peter Davis

An writer at FOMOdrive

  • Nov 22, 2023
  • 3 min read

The US Federal Reserve published the minutes of its November meeting

The minutes of the meeting held between October 31 and November 1 were announced by the Federal Reserve.

If deemed necessary, the Federal Reserve is prepared to keep increasing rates.

The dollar index is attempting to rebound from its late August low of slightly over 103.

In the third quarter, US real GDP grew at a rapid rate. The labor market was tight, with robust job growth and low unemployment rates. The Fed minutes released on Tuesday (a day earlier due to US holidays) indicated that the demand and supply for labor were beginning to even out.

In October, consumer price inflation remained elevated but showed signs of deceleration. The Personal Consumption Expenditures (PCE) price index decreased to 3.4% year-over-year. Core PCE price inflation, which does not take into account changes in energy and food prices, dropped to 3.7% year-on-year. Both headline and core PCE price inflation were notably lower than the same period last year.

Since the middle of last year, inflation has decreased, yet it is still higher than the Federal Open Market Committee's (FOMC) long-term goal of 2%. The FOMC is determined to bring inflation down to the target. It is essential that the monetary policy remains tight.

Members of the Federal Open Market Committee (FOMC) stated that if the data received suggests that the Committee is not making enough progress towards their inflation target, then further tightening of monetary policy would be necessary.

The document stated that in the upcoming months, data should help to determine the degree to which deflation persists, aggregate demand is decreasing due to stricter financial and credit regulations, and labor markets are finding equilibrium between supply and demand.

Profinance noted that the protocols did not bring any surprises and had a generally peaceful tone. The Federal Reserve appears to be taking a wait-and-see approach and will make further decisions based on incoming macroeconomic data. This explains why the market's response to the release of the protocols was relatively muted.

At its latest meeting, the Fed gave no indication of a possible rate cut, even though inflation is still above its target, according to CNBC. The minutes of the meeting were released amidst a strong belief on Wall Street that the Fed has finished its series of rate increases.

The key rate futures market data suggests that the Federal Reserve is unlikely to increase rates again in this cycle, and in fact, the market predicts that the regulator will begin to lower the rate in May. It is expected that the rate will be decreased by 100 basis points until the end of 2024.

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