Federal Reserve officials said inflation is easing, the labor market is strong and further interest rate cuts are possible, albeit at a modest pace, according to minutes from the November meeting released Tuesday. expressed confidence.
The meeting summary included multiple statements indicating that officials were satisfied with the rate of inflation, even though it remains above the Fed’s 2% target.
With this in mind, and with the belief that the employment situation remains fairly strong, Federal Open Market Committee members said further interest rate cuts are possible, although they did not say when or by what extent. He expressed the view that there is a high degree of gender.
“While discussing the outlook for monetary policy, participants said that if the data were released,
As expected, inflation continues to fall sustainably to 2%, and the economy
“While employment remains near maximum, it would be appropriate to gradually move towards a more neutral policy stance over time,” the minutes said.
The FOMC unanimously voted to lower the benchmark borrowing rate by a quarter of a percentage point to a target range of 4.5%-4.75%. Markets expect the Fed to cut rates again in December, but confidence is diminishing amid concerns that President-elect Donald Trump’s tariff plans could accelerate inflation.
The meeting ended two days after a controversial presidential campaign resulted in a Republican victory, with Trump set to begin his second term in January.
There was no mention of the election in the minutes, except for a staff note that stock market volatility rose before the Nov. 5 results and fell afterward. There was also no discussion of the impact of fiscal policy, despite predictions that President Trump’s plan, which includes tax cuts and aggressive deregulation, could have a major impact on the economy.
However, Members noted that there was overall uncertainty about how the situation would develop. Additionally, he expressed uncertainty about where the Fed needs to stop cutting rates before reaching a “neutral” rate that neither boosts nor suppresses growth.
“Many participants took the view that uncertainty regarding the level of the neutral interest rate complicates the assessment of the degree of monetary policy restraint, and that a gradual easing of policy restraint is appropriate.” “I showed that,” he said.
Conflicting signals on inflation and uncertainty over President Trump’s policies are causing traders to backtrack on their prospects for further rate cuts. The market suggests a less than 60% chance of a rate cut in December, with expectations of a rate cut of just three-quarters of a percentage point by the end of 2025.
Members appeared to spend much of the meeting discussing developments in inflation and the generally stable economic outlook.
Policymakers have expressed confidence in recent days that current inflation is being driven up by rising housing costs, and that the pace of rise in rents is expected to slow as the pace of rent increases is reflected in the data. It has been announced.
“Nearly all participants judged that although month-to-month developments remained volatile, future data were broadly consistent with a sustained return to 2% for inflation,” the document said.
Furthermore, “Participants cited a variety of factors that are likely to continue to put downward pressure on inflation, including reduced corporate pricing power, the Committee’s remaining restrained monetary policy stance, and robust long-term inflation expectations.” ” he added.
Policy makers had expressed concerns about the labor market. Nonfarm payrolls rose by just 12,000 people in October, but the small increase was largely due to storms in the Southeast and worker strikes.
Officials said they believed labor market conditions were generally strong.
“In general, participants noted that the number of layoffs remained low and there were no signs that labor market conditions would deteriorate rapidly,” the minutes said.
