Connect with us

Business

Most Fed Officials Seek to Slow Pace of Interest-Rate Hikes Soon

News Agencies

Published

on

(Bloomberg) — 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.

Most Read from Bloomberg

“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.

For Bloomberg’s TOPLive blog on the Fed minutes, click here

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.

“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,” the minutes said.

The Fed said in its policy statement that rates would continue rising to a “sufficiently restrictive” level, while taking account of cumulative tightening and policy lags.

Read more: Key Takeaways From Minutes of Fed’s November Meeting on Rates

Chair Jerome Powell explained in a post-meeting press conference that rates will ultimately go higher than officials expected when they submitted forecasts in September, while signaling the pace of increases would moderate going forward.

Several officials since then have backed downshifting to a 50 basis-point increase when they gather next month. Investors see things the same way, while betting that rates will peak around 5% by mid-2023, according to futures contracts.

Powell has a chance to influence those expectations in a speech in Washington scheduled for Nov. 30.

Officials in September saw rates reaching 4.4% by the end of this year and 4.6% in 2023. They will update those quarterly forecasts at their Dec. 13-14 meeting.

Since the November gathering, economic data have shown moderate growth with some signs of slowing inflation amid still strong demand for labor. Employers added 261,000 jobs last month and the unemployment rate rose slightly to 3.7%, though it remains very low on a historic basis.

Financial conditions have also eased since the early November rate increase. Yields on government 10-year notes have declined about 30 basis points while US equity markets have advanced.

(Adds market reaction in fourth paragraph.)

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.

Continue Reading
Advertisement

Breaking News

Advertisement

Editor Pick’s

Latest Entertainment

Iqra Aziz did not feel relaxed working with Feroze Khan Iqra Aziz did not feel relaxed working with Feroze Khan
Entertainment2 hours ago

Iqra Aziz did not feel relaxed working with Feroze Khan

Pakistani drama Actress Iqra Aziz says she did not feel relaxed while working with actor Feroze Khan. In the program...

Entertainment10 hours ago

‘Everything Everywhere All At Once’ Wins Best Feature at Gotham Awards

The 32nd annual Gotham Awards have wrapped and big winners of the night were “Everything Everywhere All at Once,” and...

Entertainment10 hours ago

Gotham Awards 2022: Winners List (Updating Live)

The 32nd annual Gotham Awards is underway (watch it live here) the celebration that marks the official start of awards...

Entertainment10 hours ago

Gotham Awards 2022: Full Winners List

The 32nd annual Gotham Awards have wrapped and big winners of the night were “Everything Everywhere All at Once,” and...

Entertainment10 hours ago

Nick Holly, Manager and Co-Creator of ‘Sons & Daughters,’ Dies at 51

Nick Holly, a manager, writer and producer who co-created the ABC comedy series “Sons & Daughters,” died Nov. 21 of...

Entertainment11 hours ago

Billie Eilish opens up about boyfriend Jesse Rutherford: ‘I’m really happy about it’

Billie Eilish and Jesse Rutherford attend the LACMA Art+Film Gala at Los Angeles County Museum of Art in Los Angeles...

Entertainment13 hours ago

Jennifer Lopez reflects on Ben Affleck split: ‘I honestly felt like I was going to die’

Jennifer Lopez celebrates 20th anniversary of This Is Me…Now and reflects on Ben Affleck relationship. (Photo: Barcroft Media via Getty...

Entertainment14 hours ago

Collin Gosselin says reality TV affected relationship with mom Kate: ‘I think it tore us apart’

Kate and Jon Gosselin’s son Collin is opening up about his mom. The 18-year-old, who appeared on the reality show...

Latest Sports

Sports35 mins ago

Fantasy Football: Early waiver wire pickups for Week 13

Check out two players to consider pursuing on the waiver wire in fantasy leagues ahead of Week 13.

Sports55 mins ago

Jones, Maddux, Morris consider Bonds, Clemens for Hall

Sixteen members of the contemporary baseball era committee will meet to consider the Cooperstown fate of an eight-man ballot.

Sports1 hour ago

Steve Kerr, Warriors view James Wiseman’s G League assignment as ‘long term’

Steve Kerr spoke about James Wiseman's development prior to the Warriors' game against the Timberwolves on Sunday.

Sports2 hours ago

World Cup 2022: Cameroon GK Andre Onana misses Switzerland match, reportedly leaves team after disagreement with coach

Andre Onana is reportedly no longer with the national team after he disagreed with the coach's defensive tactics.

Sports2 hours ago

Patriots owner Robert Kraft gives Devin McCourty special gift before 200th game

Devin McCourty will reach a special milestone Thursday against the Bills, and Patriots owner Robert Kraft presented the veteran safety...

Sports3 hours ago

Lakers blow 17-point lead late as they fall to Pacers at the buzzer

The Lakers blew a 17-point lead late as Pacers' Andrew Nembhard made a three-pointer at the buzzer as the Lakers...

Sports3 hours ago

Why NBA players channeling ‘Mamba Mentality’ bothers Warriors GM Bob Myers

Warriors general manager Bob Myers isn't a fan of players channeling Kobe Bryant's famous "Mamba Mentality."

Sports3 hours ago

Jaguars safety happy for Trevor Lawrence after breakout game: ‘He had to deal with Urban Meyer last year’

Andrew Wingard said he 'would die for' new head coach Doug Pederson.

Technology Hot News

Is Elon Musk Really Going to Buy Twitter? Is Elon Musk Really Going to Buy Twitter?
Technology1 month ago

Is Elon Musk Really Going to Buy Twitter?

Elon Musk, the owner of the electric car company Tesla, CEO of SpaceX, and the richest man in the world,...

WhatsApp services were affected across Pakistan, restored after 2 hours WhatsApp services were affected across Pakistan, restored after 2 hours
Technology1 month ago

WhatsApp services were affected across Pakistan, restored after 2 hours

WhatsApp services were affected in various countries of the world, including Pakistan, and India due to this users were facing...

Bitcoin vs Litecoin: A guide to understanding cryptocurrencies Bitcoin vs Litecoin: A guide to understanding cryptocurrencies
Technology2 months ago

Bitcoin vs Litecoin: A guide to understanding cryptocurrencies

Cryptocurrencies currently occupy an odd place in society. They are no longer the super niche bizarre currency beloved by tech...

Personal data of people is selling on Google Play and Google Ads Personal data of people is selling on Google Play and Google Ads
Editor Picks3 months ago

Personal data of people are sold on Google Play and Google Ads

It’s been two to three years since Google has been unknowingly hosting multiple apps from malicious actors who sell personal...

Protonmail is down a second time in the past 24 hours Protonmail is down a second time in the past 24 hours
Technology5 months ago

Protonmail is down a second time in the past 24 hours

An end-to-end encrypted email service Protonmail is down a second time in the past 24 hours, netizens reported on social...

What's better for the student: a tablet or a laptop What's better for the student: a tablet or a laptop
Technology6 months ago

What’s better for the student: a tablet or a laptop

Some analysts argue that computers have outlived their usefulness. There is some truth in this: PC and laptop sales are...

Tesla founder Elon Musk holds the Twitter deal temporary Tesla founder Elon Musk holds the Twitter deal temporary
Technology7 months ago

Tesla founder Elon Musk holds the Twitter deal temporary

USA: Elon Musk, the founder of companies like Tesla and SpaceX, can actually buy anything in the world. Last month,...

How Zafar Supari is utilizing his ability on Snapchat? How Zafar Supari is utilizing his ability on Snapchat?
Technology7 months ago

How Zafar Supari is utilizing his ability on Snapchat?

Pakistan: Zafar Supari a public figure, businessman, and social media sensation has crossed one hundred thirty-three thousand 133k subscribers on...