The Federal Open Market Committee (FOMC) recently released its November meeting minutes. In the meeting, “a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.”
“The minutes from the FOMC’s latest meeting confirm that the committee will slow the pace of rate hikes,” said NAFCU Chief Economist and Vice President of Research Curt Long. “That likely means a 50 basis point increase next month, at which point the debate will focus on whether another similar sized increase is needed in February, or if the committee can ratchet down again to a 25 basis point hike.”
When discussing current economic conditions, participants highlighted that recent indications reveal a modest growth in production and spending. Meanwhile, consumer spending has softened with a “reduction in discretionary expenditures, especially among lower- and middle-income households.” The participants also noted that the labor market remains strong, regardless of slowing economic activity.
Additionally, the FOMC discussed how the economy often lags behind monetary policy actions. However, participants stated that inflation is showing little signs of ending, and “with supply and demand imbalances in the economy persisting, their assessment of the ultimate level of the federal funds rate that would be necessary to achieve the Committee’s goals was somewhat higher than they had previously expected.”
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