
Minutes from the Federal Reserve’s latest monetary policy committee meeting reveal there are no plans to cut interest rates in the near future.
Jerome Powell, in the meeting, suggested “We will need to see continuing evidence to build confidence that inflation is moving down sustainably to our goal.” The current Fed Rate at 5.25% -5.5% is the highest it’s been in 23 years, a rate that has remained unchanged since July of 2023.
Fed minutes confirm that no rate cuts are imminent | Economy and Business – english.elpais.com
Excerpt:
The minutes of the Federal Reserve’s monetary policy committee meetings are always revealed late. And when the economy is, as it is now, at a turning point, a three-week drag can be a long time. With that caveat, the minutes from its January 30-31 meeting confirm the message already delivered by Federal Reserve Chairman Jerome Powell: rates have peaked, their next move will be down, but that is not imminent. Add to each of these statements the adverb “foreseeably”.
Powell usually gives a good summary of the meetings, but their minutes add valuable nuance. On this occasion, most of the Fed’s message sounds familiar, but the minutes include an explicit warning against rushing too quickly into rate cuts: “Some participants noted the risk that progress toward price stability could stall, particularly if aggregate demand strengthened or supply side healing slowed more than expected. Participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained. Most participants noted the risks of moving too quickly to ease the stance of policy and emphasized the importance of carefully assessing incoming data in judging whether inflation is moving down sustainably to 2%. A couple of participants, however, pointed to downside risks to the economy associated with maintaining an overly restrictive stance for too long.”
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