While Americans prepare for meals, families and football on Thursday, investors waited until Wednesday afternoon before beginning to express their gratitude.
That’s because the Federal Reserve has released the minutes of its latest meeting on Wednesday at 2:00 pm ET.
At its Nov. 2 meeting, the Fed raised interest rates by three-quarters of a percentage point — Four consecutive hikes of such magnitude. However, Fed Chairman Jerome Powell suggested at a press conference that the Fed may soon start slowing its pace of rate hikes.
The minutes of that meeting showed that several other Fed policymakers agreed with Powell’s assessment.
“Many participants observed that as monetary policy approaches a stance sufficiently restrictive to meet the Committee’s objective, it would be appropriate to slow the pace of increase in the target range of the federal funds rate. ‘ said the Fed. minute.
The Federal Reserve added that “a majority of participants decided that a slowdown in the pace of growth was likely to be appropriate soon.”
Stocks, which were relatively flat and meandering before the minutes were released, surged after the announcement. The Dow is up almost 100 points, or 0.3%. The S&P 500 has him up 0.5% and the Nasdaq has him up nearly 1%.
Other Fed members, most notably Vice Chair Rael Brainard, also hinted in a recent speech that the pace of the hike was slow. but, confusing signal from others federal officialsthey continue to stress that inflation will not go away and must be brought under control.
To that end, the Fed said in its minutes that inflation remains “stubbornly high” and “more persistent than expected.”
With that in mind, traders are now pricing in a more than 75% chance that the Fed will raise interest rates by half a percentage point at its Dec. 14 meeting. by CME futures contractThis is up from 52% odds of a half-point rate hike a month ago, but lower than the 85% chance of a half-point rate hike priced in just last week.
A series of recent inflation reports seem to suggest that the pace of runaway price increases is finally starting to slow to more manageable levels. Increase in unemployment claims from a week ago.
But as long as the labor market remains strong and inflationary pressures continue to abate, the Fed is likely to scale back its rate hikes.
Some experts are increasingly concerned that if the Fed raises interest rates too much, it could eventually slow the economy too much, leading to a large rise in unemployment, unemployment, and even a recession. increase.
Still, Wall Street is growing more confident that the Fed may be able to pull off what it calls a soft landing.of Dow surged 14% in October, Best month since January 1976. The Dow rose nearly 4% in November and is down just 6% this year.