For the full text from the Meeting minutes CLICK HERE.
- Substantial majority of participants at November meeting judged a slowing in the pace of the interest rate hikes would likely still be appropriate
- a slower pace of rate hikes would better allow the FOMC to assess progress toward its goals given the uncertain lags around monetary policy
- a few participants said slowing the pace of rate hikes could reduce the financial system risks; others that slowing should await more progress on inflation
- with monetary policy approaching a sufficiently restrictive level, participants emphasized the final destination of Fed funds rate have become more important than pace
- some participants remarked that more restrictive policy was consistent with risk management; some observed rising risk of over tightening
- participants concurred there were very few signs of inflation pressures updating
- participants generally noted that risks to the inflation outlook remain tilted to the upside
- all participants agree that 75 basis point increase was appropriate
- many participants noted significant uncertainty about ultimate level of Fed funds rate needed to tame inflation
- many thought that terminal rate was higher than previously expected
- participants observed the labor market remained tight; many noted that tentative signs it might be moving slowly toward better balance of supply and demand
- despite elevated interest rate volatility in indications of strained liquidity conditions, functioning of the treasury security market have been orderly
Reactions by the market have
- the US rate futures seeing a terminal rate of 5.03% in June
US stocks are higher:
- Dow industrial average up 115 points or 0.33%
- S&P index up 21.5 points or 0.54%
- NASDAQ index up 103 points or 0.92%
- Russell 2000 up 4.64 points or 0.25%
in the US debt market:
- 2 year 4.48%, -3 point basis points
- 10 year 3.713%, -4.5 basis points
in other markets:
- Spot gold is trading up $9.30 or 0.56% at $1749.53
- Silver is trading at $21.49 up $0.42
- crude oil is trading at $77.76
- bitcoin is trading at $16,593
in the Forex:
- EURUSD traded just above its 200 day moving average 1.03969. The price reached the natural resistance level 1.04002 and backed off. It currently trades at 1.0389
- USDJPY moved to a new session low of 139.428. The price moved below the low price from Friday at 139.615. There is a swing area below between 138.87 and 139.09.
- The GBPUSD as backup testing the 50% midpoint of the 2022 trading range of 1.20499. Move both momentum would have traders looking toward the 200 day moving average at 1.21971 over time.
