Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Fed members support slowing of rate hikes 'soon,' Fed Minutes show

Economy Nov 23, 2022 02:08PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Yasin Ebrahim

Investing.com – A majority of Federal Reserve policymakers were in support of slowing the pace of interest rate hikes "soon" to assess the lagged impact of monetary policy tightening on the economy and inflation. 

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the Fed's minutes showed. “The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important.”

At the conclusion of its previous meeting on Nov. 2, the Federal Open Market Committee raised its benchmark rate by 0.75 percentage points to a range of 3.75% to 4%. 

It was the fourth-straight 0.75 percentage point rate hike in as many meetings, but the Fed also laid out the carpet for slowing the pace of rate hikes at upcoming meetings, flagging several factors ---- including the cumulative tightening of monetary policy, the lagged impact of monetary policy on the economy and inflation – that would determine the size of future hikes.

In the wake of recent data pointing to slowing but still above-trend inflation, several members have continued to echo market expectations for less hawkish rate hikes. There were some Fed members, however, who preferred to hold of slowing hikes until  "the stance of policy was more clearly in restrictive territory and there were more concrete signs that inflation pressures were receding significantly," according to the statement.

About 80% of traders expect the Federal Reserve to slow the pace of rate hikes to 0.5% in December, according to Investing.com’s Fed Rate Monitor Tool.

With a slower pace of rate hikes largely priced in, investor attention has shifted to the terminal Fed Funds rate, or the level that rates will likely peak. The end game for rate hikes has also become an increasingly important factor for the Fed, though members acknowledged that while rates need to move higher than previously expected, there remains uncertainty around the terminal rate needed to achieve the central bank's objective.   

"Participants commented that there was significant uncertainty about the ultimate level of the federal funds rate needed to achieve the Committee's goals and that their assessment of that level would depend," the minutes showed. 

Traders are currently expecting rates to peak at 5.00% to 5.25%, though hawkish Fed members including St. Louis Fed President James Bullard recently suggested that rates may need to rise as high as 7% to bring down inflation. 

Yet, even if rates do peak around 5% that would still be the highest rates seen since June 2006, and may prove painful for risk assets, with growth sectors of the market including tech particularly vulnerable. 

“If they stop at 5% or 6% interest rates, that's pretty high, certainly compared with what we've seen over 10 to 20 years,” Managing Director of applied research at Qontigo Melissa Brown, told Investing.com's Yasin Ebrahim on Tuesday. For equities, the focus “will not be when they stop and stabilize, but really when they start to come down.”

Fed members support slowing of rate hikes 'soon,' Fed Minutes show
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (21)
Saul morales
Saul morales Nov 27, 2022 9:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
the indicators show that inflation is peace so no reason to continue hiking
dppttw ox
dppttw ox Nov 23, 2022 10:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
i dont see chairman powell in this article. same bs as taper.
Edward Lee
Edward Lee Nov 23, 2022 6:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The issue is if the high price which is already very high, especially food price, a lot of have been double comparing to the price of two years ago, be knock down to that of two years ago? Just to knock the inflation to 2% with a much higher base price comparing to two years ago is not enough, because people still suffer with current high price while people,s income did not go up much plus with very high interest rate which increase mortgage and credit card payment to a enormous high level as well as the rent which will never go down by itself unless we have a recession or deflation. I do not believe with rate of 6% or even 7% will ever bring down the inflation at all looking at the fact that in 1980 paul Walker needed to raise the rate to 20% to bring down the inflation with inflation over 10%. Why this time will be different with we have both demand and supply issuesz. The later the FED is really serious to knock down the inflation, the higher price people will pay
Tre Hsi
Tre Hsi Nov 23, 2022 6:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
i don't think anyone is expecting inflation to go back to 2% anytime soon, but back to the historical average of 4 or 5% by end of 2023 is not unreasonable
marcos buzaglo
marcos buzaglo Nov 23, 2022 5:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Kathy Wood was rigth, when she said the Fed and Powell where wrong.
Tre Hsi
Tre Hsi Nov 23, 2022 5:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this is the same Cathie Wood who said the price of BitCoin will hit $1m?
Mike Hawk
Mike Hawk Nov 23, 2022 4:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hyperinflation is how this ends
Stephen Fa
Stephen Fa Nov 23, 2022 4:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
With $31 trillion in US government debt and no end of its rise in sight, eventually hyperinflation is inevitable.
Tre Hsi
Tre Hsi Nov 23, 2022 4:32PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Stephen Fa  is it?  consider this, after reaching over 10% in 1981, inflation started to drop since early-mid 80's while Reagan spent money like a drunk sailor, increasing Fed budget deficit every year....every president since Saint Ronny ran high federal budget deficit, except slick Willy Clinton who actually had a balanced budget for 2 years.....inflation in the last 20 years stayed nearly all time low while Bush/Obama/Trump tried to outspend each other, making Reagan looking like a fiscal hawk......the current inflation, while high, is hardly hyperinflation and is starting to ease already
Ac Tektrader
Ac Tektrader Nov 23, 2022 4:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
looks like my analysis was correct ...look for that 4100 on the S& p500.... if we see 2 closes above approx 4125 then 4300 is possible before the end of the year .....and we will still be in a bear market.
Benjamin USA
Benjamin USA Nov 23, 2022 4:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sooner then they expect, per the market pricing
First Last
First Last Nov 23, 2022 4:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Reminder:  In 1982, the market bottomed 2 months BEFORE Volcker said Fed "may shift tactics".
First Last
First Last Nov 23, 2022 4:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
2022's low was reached 6 weeks ago.
Ac Tektrader
Ac Tektrader Nov 23, 2022 4:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
first and last ....I think you're right ...the markets will signal when the FED is ready to alter course.. expect an attempted retest of that low. if that happens, volume will be the key.
maggie rey
maggie rey Nov 23, 2022 3:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the Fed's minutes showed. “The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important.” And it's  a  somewhat probable maybe that  "substantial"  "likely" and"soon" will actually be defined at point in the unspecified future....
First Last
First Last Nov 23, 2022 3:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It's as if the Fed members aren't confident they can predict the future!
Mauricio V.
Mauricio V. Nov 23, 2022 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Well, I was waiting for the apocalypse but it's doesn't come. Michael Burry what are your thoughts?
First Last
First Last Nov 23, 2022 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Look up his portfolio
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email