New Deal democrats Leading Indicators November 24 2023

Fed officials thought rates could rise more if inflation stayed stubborn

NY Times – Nov 21

Federal Reserve officials are contemplating whether they will need to raise interest rates again to cool the economy and ensure that rapid inflation will fully fade, and minutes from their meeting earlier this month laid out the contours of that debate.

“Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the committee’s inflation objective was insufficient,” according to minutes from the central bank’s Oct. 31-Nov. 1 meeting, which were released Tuesday.

Fed officials thought that the “data arriving in coming months would help clarify the extent to which the disinflation process was continuing.” 

Central bankers voted to leave interest rates unchanged in a range of 5.25 percent to 5.5 percent at their most recent gathering, allowing themselves more time to assess whether their substantial rate moves so far are weighing on demand.

Wall Street is keenly focused on what officials will do next. Fed policymakers had predicted one more 2023 rate move as of their September economic projections, but investors think there is little chance they will raise rates at their final meeting of the year on Dec. 12-13. Tuesday’s minutes may serve to bolster that expectation of an extended pause, because they suggested that officials planned to watch how the economy shaped up over the course of “months.” …