The minutes of the Federal Open Market Committee (FOMC) meeting, to be released by the Fed, may provide important clues as to whether the interest rate hike in September was a one-off “credibility move” or the beginning of a new monetary tightening cycle.
Investors are expected to closely watch the FOMC minutes to better understand the Fed’s decision-making process following last month’s interest rate hike.
BMO strategist Ian Lingen noted that one of the prevailing views in the markets prior to the last Fed meeting was that Fed Chairman Warsh needed to raise interest rates not because recent economic data directly warranted further tightening, but rather to maintain the central bank’s credibility regarding monetary policy.
Lingen said it would be particularly important to see to what extent FOMC members discussed a similar “credibility-driven rate hike” approach at the meeting.
“It will be quite interesting to see to what extent the committee discusses a similar credibility-based framework for rate hikes. If this view is indeed thoroughly considered, it could point to a more gradual rate hike process in the future, consistent with Williams’ recent statements.”
Lingen also stated that the FOMC would focus on how it assesses the balance of risks to the Fed’s “dual mandate” of full employment and price stability.
These discussions in the minutes could reveal just how strong the Federal Reserve officials’ desire is to continue raising interest rates. They could also offer important signals about whether markets will truly view the September rate hike as a one-off policy move.
The FED minutes will be released at 9:00 PM Turkish time (2:00 PM ET). We will share all the details with you as soon as it is released on Bitcoinsistemi.com.
*This is not investment advice.
