FOMC minutes from the November 2022 Fed meeting: Slowing of pace of rate hikes appropriate

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 Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term
• 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.