The first 2023 FOMC Minutes have been published, with investors seeking more information on the near-term path of monetary policy and any comments on the possibility that the Federal Reserve return to 50 basis point hikes.
Key notes from the FOMC minutes
Some participants were in favor of raising rates 50 basis points.
All participants agreed that more rate increases are needed to achieve the Federal Open Market Committee’s job of inflation targeting.
Participants said tight monetary policy is needed until the Fed is confident that inflation will fall to 2%; He added that the process is likely to take “some time.”
All participants were in favor of further reductions in the Fed’s balance sheet under the current plan.
Participants said the uncertainty associated with the outlook for the economy, the labor market and inflation was “high.”
Members saw upside risks to inflation, including China’s economic reopening and Russia’s war in Ukraine.
Participants said the risks to the economic outlook were tilted to the downside.
Several participants said the protracted US debt ceiling process could pose “significant risks” to the financial system and the economy.
The members said that the labor market is “very tight”, labor demand exceeds the available supply.
Participants said the continued tight labor market would contribute to upward pressure on inflation.
The members said that inflation in the last three months has decreased, but they need to see more progress.
Some participants saw an elevated outlook for a recession in 2023.
The dollar and the daily treasury yields
The dollar rose from a fresh low of 104.25 in the American session in anticipation of a hawkish outcome and settled at 104.35 moments before the publication.
The DXY is rising to all-time highs on the prospect of a 50 basis point rate hike next time.
About the FOMC Minutes
FOMC is the acronym for the Federal Open Market Committee which holds 8 meetings a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses risks to its long-term objectives of price stability and sustainable economic growth. . The FOMC Minutes are published by the Board of Governors of the Federal Reserve and are a clear guide to future interest rate policy in the United States.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
