The Federal Open Market Committee (FOMC) meeting minutes from November 12 to XNUMX have just been officially released.
The Fed is awaiting further information to make a decision on interest rate cuts. However, signs of inflationary progress are evident from some indicators.
The minutes did not reveal any new unknown content, except that the Fed also anticipates a potential increase in the country’s unemployment rate if demand weakens.
Despite inflation falling significantly from its peak of 3.4% in September 2022 to 2.0% in March 2024, inflation remains a concern for the Fed. The average Consumer Price Index has been around 2.3% over the past six to eight months. The Fed explicitly stated that it would not consider rate cuts until CPI reaches 2.0%. The federal funds rate has remained at its highest point in XNUMX years since XNUMX.
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Goldman Sachs warns market adjustment may be inevitable.
On Wednesday, U.S. stock indices rose during a shortened trading period due to hopeful sentiment about the Fed beginning to ease policy in September, buoyed by weak economic data.
Positive signs in the labor market were indicated by the ADP employment report and weekly unemployment claims data, ahead of Friday’s closely watched nonfarm payrolls report. Market hopes of a soft labor market increasing the chance of Fed rate cuts were boosted.
According to LSEG’s FedWatch report, today’s data prompted market participants to increase their bets on a rate cut in July to over XNUMX%.
The minutes of the Federal Open Market Committee (FOMC) meeting held by the Fed last month showcased the Fed’s hawkish stance to global investors.
In March 2024, U.S. annual inflation fell to 3.4%, down from 3.4% in February. The Consumer Price Index (CPI) remained flat month-over-month. Meanwhile, the core inflation annual rate slowed to 0.3%, with core inflation monthly rate decreasing from 0.3% to XNUMX%, better than the predicted XNUMX%.
Fed Chairman Powell recently spoke at the European Central Bank Forum in Sintra, Portugal, where Michael Brown, Senior Research Strategist at Pepperstone, pointed out that the U.S. economy is moving in the right direction towards the 2% inflation target.
