Most Fed Officials Seek to Slow Pace of Interest-Rate Hikes Soon
Federal Reserve officials at their meeting earlier this month concluded it would soon be appropriate to slow the pace of rate increases, signaling the central bank was leaning toward downshifting to a 50 basis-point hike in December.
“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” according to minutes from their Nov. 1-2 gathering released Wednesday in Washington.
At the same time, “various” officials concluded that “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.”
US stocks and Treasuries rallied while the dollar fell following the report, as investors took a dovish message from the minutes.
At the meeting, officials raised the benchmark rate 75 basis points for a fourth straight time to 3.75% to 4%, extending the most aggressive tightening campaign since the 1980s to combat inflation at a 40-year high.
Officials discussed the effects of lags in monetary policy and the effects on the economy and inflation, and how soon cumulative tightening would begin to impact spending and hiring. A number of Fed officials said a slower pace of rate increases would allow the central bankers to judge progress on their goals.