Unsurprising FOMC minutes
Minutes from the latestĀ FOMC meeting were hawkish but investors were expecting this narrative.Ā The document did not present manyĀ new information regarding further steps that the FED intends to take regarding fiscal policy in February. Markets were primarily focused on additional comments regarding the condition of the US labour market, but no major comments were provided. Following the relelase US equities pulled back slighlty, while USD was little changed.
Below you can find key takeaways from Minutes:
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Upside inflation risks remained a key factor in shaping policy outlook.
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Ā Several participants emphasized the importance of communicating that a slowdown in rate increases is not an indication of a weakening commitment to achieving price stability or that inflation is already on a persistent downward path.
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PolicymakersĀ welcomed October and November inflation drops, but agreed that it would take substantially more evidence of progress to be confident of a sustained downward path.
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Majority of FED memebrsĀ emphasized the importance of retaining flexibility and optionality when adopting a more restrictive stance.
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Ā Central bankers observed that slowing interest rate hikes would allow the central bank to assess inflation and employment progress.
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Participants agreed that the Fed had made significant progress in the previous year toward a sufficiently restrictive monetary policy stance.
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Slowing interest rate increases would allow the central bank to assess inflation and employment progress.
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No one predicted that rate cuts would be necessary in 2023
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Participants predicted that further increases in the fed funds rate would be appropriate.
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Fed had made significant progress in moving to a sufficiently restrictive monetary policy stance in the previous year.
Despite the lack of clear changes compared to the earlier announcements of the FED bankers, the current FOMC Minutes were a bit more hawkish than the November ones. Source: Bloomberg
US500 is rather unimpressed by today's Minutes. Index continues to trade below major resistance at 3920 pts. Source: xStation5
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