Federal Reserve Releases Latest Monetary Policy Minutes
The minutes from the Federal Reserve's monetary policy meeting indicate that officials believe there will be rate cuts in the future, but only gradually. "Fed Whisperer" Nick Timiraos noted that officials discussed the option to slow down or pause rate cuts if the process of reducing inflation encounters obstacles during the meeting earlier this month.
On November 26 local time, the three major U.S. stock indices closed higher, with the Dow Jones Industrial Average rising by 123.74 points, an increase of 0.28%, closing at 44,860.31 points; the Nasdaq Composite increased by 119.46 points, an increase of 0.63%, closing at 19,174.30 points; and the S&P 500 index rose by 34.26 points, an increase of 0.57%, closing at 6,021.63 points. During Tuesday's trading session, the Dow reached a high of 44,903.01 points and the S&P 500 index rose to 6,025.42 points, both hitting intraday historical highs.
On that day, the Federal Reserve released the minutes from its last monetary policy meeting. Decision-makers cut rates by 25 basis points at the last meeting, in line with widespread expectations and reflecting reduced risks to economic activity and employment.
The minutes show that Federal Reserve officials expressed confidence that inflation is easing and the labor market is strong, allowing for further rate cuts, albeit in a gradual manner.
The minutes include several statements indicating that officials are satisfied with the pace of inflation and confident that employment conditions remain quite stable. Members of the Federal Open Market Committee (FOMC) stated that further rate cuts could be possible, but did not specify when or by how much.
The minutes state: "In discussing the outlook for monetary policy, participants expected that if the data are consistent with expectations, inflation continues to sustain below 2%, and the economy remains close to maximum employment levels, then over time, a gradual shift to a more neutral policy stance may be appropriate."
The market expects the Federal Reserve may cut rates again in December, but confidence has somewhat weakened due to concerns that President-elect Trump's tariff plans could drive up inflation.