Bulgaria time 21:00 today, the minutes of the Federal Open Market Committee (FOMC) meeting held from November 12th to Xth will be released.
These details will help in understanding whether Federal Reserve officials have adopted a more dovish or hawkish stance in recent months. Given signs of easing inflation rates but with continued flexibility, these minutes are crucial for global investors attempting to assess future Fed policy.
In November 2024, annual inflation in the United States decreased from 3.4% in March to 3.4%. The Consumer Price Index (CPI) remained unchanged from the previous month, while the core inflation rate, excluding variables, fell to 0.2% year-on-year and 0.3% from the previous quarter, both slightly better than expected.
Despite inflation decreasing significantly from a peak of 9.1% in March 2022 to 2% in March 2024, inflation remains a concern for the Federal Reserve. Over the past six to eight months, the average CPI has remained around 2.3%. The Fed has explicitly stated no interest rate cuts will be considered until CPI reaches 2.0%, and the federal funds rate has remained at its highest point since March 2023.
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At the European Central Bank Forum in Sintra, Portugal, Federal Reserve Chairman Powell expressed a slightly dovish outlook. Michael Brown, Senior Strategist at Pepperstone, noted Powell’s acknowledgment of progress towards achieving the 2% inflation target and highlighted tightening trends indicated by the latest CPI and PCE reports.
José Torres, Senior Economist at Interactive Brokers, emphasized Powell’s cautious stance on the possibility of an economic downturn. He underscored Powell’s focus on a balanced tightening monetary policy to prevent a resurgence of inflation while avoiding economic decline.
