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Business News/ Markets / Stock Markets/  US Fed Meeting Minutes: FOMC shifts into cautious policy mode, no indication of rate cut; check out 10 key highlights
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US Fed Meeting Minutes: FOMC shifts into cautious policy mode, no indication of rate cut; check out 10 key highlights

The minutes of the October 31 - November 1 Federal Open Market Committee (FOMC) meeting release on Tuesday showed that the committee was emphasizing on how higher interest rates were starting to squeeze households and businesses.

The US Fed officials unanimously decided to keep the benchmark lending rate unchanged in a range of 5.25% to 5.5% for the second straight time.Premium
The US Fed officials unanimously decided to keep the benchmark lending rate unchanged in a range of 5.25% to 5.5% for the second straight time.

The US Federal Reserve officials at their latest policy meeting agreed to “proceed carefully" and only raise interest rates if progress in controlling inflation faltered.

The minutes of the October 31 - November 1 Federal Open Market Committee (FOMC) meeting release on Tuesday showed that the committee was emphasizing on how higher interest rates were starting to squeeze households and businesses.

Here are key highlights from the US Fed meeting minutes:

1) The Fed officials unanimously decided to keep the benchmark lending rate unchanged in a range of 5.25% to 5.5% for the second straight time.

2) All participants agreed that the Committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information and its implications for the economic outlook as well as the balance of risks.

Read here: Fed minutes show unity on cautious approach to future rate hikes

3) Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee's inflation objective was insufficient.

4) All participants judged that it would be appropriate for policy to remain at a restrictive stance for some time until inflation is clearly moving down sustainably toward the Committee’s objective.

5) Participants also observed that the continuing process of reducing the size of the Federal Reserve’s balance sheet was an important part of the overall approach to achieving their macroeconomic objectives. 

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6) A few participants noted that the process of balance sheet runoff could continue for some time, even after the Committee begins to reduce the target range for the federal funds rate. 

7) Members would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’s goals. Members also agreed that their assessments would take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. 

8) Participants also noted that tighter financial and credit conditions facing households and businesses would likely weigh on economic activity, hiring, and inflation, although the extent of these effects remained uncertain.

Also Read: Bank of America sees S&P 500 hitting record 5,000 by the end of 2024

9) Participants observed that, notwithstanding the moderation of inflation so far, inflation remained well above the Committee’s 2 percent longer-run objective and that elevated inflation was continuing to harm businesses and households, particularly low-income households. 

10) Participants stressed that they would need to see more data indicating that inflation pressures were abating to be more confident that inflation was on course to return to 2 percent over time.

(With inputs from Reuters)

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Published: 22 Nov 2023, 07:02 AM IST
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