At the meeting of the Federal Open Market Committee (FOMC) on 1 and 2 November, officials decided that it would soon be appropriate to slow down the rate increase. This suggests that the Fed is leaning towards slowing the rate rise to 0.5 points at the December meeting.
“Most of the participants decided that slowing the pace of the increases would likely be appropriate in the near term,” said the minutes of the meeting, published Thursday.
At the same time, “various” officials concluded that “the final level of the Federal Funds (FF) rate needed to reach the Commission’s target is slightly higher than previous projections.”
Chairman Powell Says Peak Interest Rates Higher Than Previously Expected – Pace Of Rate Increases May Slow (3)
Lindsey Piexza, chief economist at Stifle Nikolaus, said there was “broad acceptance of the need to slow down” in rate hikes, adding that there was a notable bias among Fed officials towards a 0.5 percentage point slowdown.
“The FOMC minutes reveal a surprisingly strong dovish bias at the committee and staff level,” said Anna Wong, chief US economist at Bloomberg Economics. “There is broad agreement on a slower pace of rate hikes, and we believe that has been promoted by the Vice Chairman of the Brainerd fed, but little confidence as to how high rates should rise.” he did.
Officials discussed the delay in the impact of monetary policy on the economy and inflation, and how long it takes for cumulative tightening to start affecting spending and employment. Some officials said the slow pace of rate hikes would allow the FOMC to measure progress toward its target.
FOMC Statement: Considering future pace of tightening, cumulative effects and economic conditions
“The uncertainty surrounding the timing and extent to which monetary policy actions will affect economic activity and inflation is another reason why such an assessment is important,” the minutes said.
Original title:Most Food Officials Seek to Slow Down Interest Rate Rise Soon (抜粋）
(Updated with economist comments in the 4th and 5th paragraphs)