Fed minutes: Cost of doing too little outweighs cost of doing too much

According to the minutes of conversations among Fed officials at their policy meeting three weeks ago

some Fed officials judged that the costs of taking too little action to lower inflation likely outweighed the costs of taking too much action, reflecting previous public pronouncements.

According to Michael Pearce, senior US economist at Capital Economics, "the minutes provided some hints that Fed officials are beginning to lay the groundwork for a slower pace of rate hikes

the overall tone was still hawkish, suggesting that the Fed will push ahead with another 75bp hike at the November meeting."

Participants believed that a restricted posture should be maintained for as long as required, with a couple highlighting how historical precedent demonstrated the risk 

At the time, Fed policymakers noted that inflation data had exceeded expectations and was dropping more slowly than expected, but still believed it was "unacceptably high."

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