Fed Minutes Show Hawkish Plan

This afternoon, the Federal Reserve released the minutes of their last meeting. These minutes always take a bit of deciphering to figure exactly what’s going on. Here’s how I see it.

The Fed appears to be on a firm path to continue to raise interest rates. This is despite President Trump’s seeming displeasure with their plans. The market currently expects a rate increase in December, plus three more next year. I should add that the last Fed meeting happened before the stock market started to get antsy.

In the last Fed policy statement, they removed the word “accommodative.” Jay Powell, the Fed chair, downplayed any concerns that it was a change of pace for the Fed. The minutes made it clear that removing the word was not a signal that the rate hikes were coming to an end.

I still think the Fed is being needlessly aggressive with interest rates. Inflation just doesn’t seem to be a problem. I wouldn’t be surprised if the Fed has to ditch its plans for three rate increases in 2019.

Posted by on October 17th, 2018 at 4:26 pm


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