FOMC meeting minutes have been published for the meetings dated December 12-13, where the FED kept interest rates constant. Here are the meeting details of the members who took part in making the decision followed by the whole world.
- Some participants said the interest rate could remain at its peak for longer than expected.
- FED officials think that the policy will remain restrictive for a while.
- Authorities admitted that projections show interest rate cuts until the end of 2024.
- Officials saw that the policy rate was probably at or near its peak.
- The staff's economic outlook was broadly similar to the projection prepared for the previous meeting.
- All officials said there is clear progress toward the Fed's 2% inflation target in 2023.
- Authorities assessed that GDP growth will cool and the rebalancing of the labor market will continue in 2024.
- Authorities believe that risks to inflation and employment are moving towards balance.
- Most respondents expect the restrictive policy stance to continue to moderate spending and reduce inflation.
- Participants observed that the progress in inflation was unbalanced among components and stated that prices of basic services were still increasing at a high rate.
- Some participants highlighted uncertainty about how long the restrictive policy should be maintained.
- FED officials said further interest rate increases may be appropriate.
- Participants generally emphasized the importance of maintaining a careful and data-driven approach.
Exactly when the Fed will start cutting interest rates remains a big unknown for markets and economists as 2024 begins, and new details about its pivot in that direction could emerge from Wednesday's reading of its final policy meeting of 2023.
FED officials kept the policy rate steady in the range of 5.25% to 5.5% at their mid-December meeting, but most officials expect it will need to fall by at least 75 basis points during the year as inflation declines steadily to the FED's 2% target. He published projections showing
However, while year-end projections left the timing of the first interest rate cut uncertain, FED President Jerome Powell insisted at the press conference after the meeting that this was not yet an issue on the agenda.
Investors who want to see the FED move quickly to reduce borrowing costs expect the first interest rate cut to be made in March, according to the market pricing of contracts linked to the Fed policy rate. Economists think that the FED will remain on hold until the middle of the year.
*This is not investment advice.
