At the July 30-31 Federal Open Market Committee meeting, several officials said they believe there is a valid case for lowering interest rates. At the meeting, it was unanimously decided to leave the main policy interest rate unchanged. This was revealed in the minutes of the meeting published on 21 August.
Minutes of the meeting“Several respondents believed that recent developments in inflation and rising unemployment provided a reasonable case for cutting the policy rate by 25 basis points (bp, 1 bp = 0.01%) at the meeting; “I would have supported such a decision. “
“If the data continues to be in line with expectations, a majority said a rate cut at the next meeting is likely to be appropriate.”
Although borrowing costs are at their highest level in nearly 20 years, the briefings indicated a growing consensus among officials that the risks to meeting their inflation and earnings goals equal now. Federal Reserve Chairman Jerome Powell said at a press conference on July 31 that the FOMC will seek “more confidence” that inflation is on track to the group’s 2% target before it begins cutting interest rates.
Video: Bloomberg telecast of FOMC minutes
Source: Bloomberg
“A majority of participants reported that risks to the earnings objective had increased, while many noted that risks to the inflation objective had decreased,” the minutes said. of participants noted that there is a risk that a further gradual decline in labor market conditions could lead to a more severe downturn.”
The July results were announced on August 2m employment statisticsIn this case, the growth in the number of employees has become slower than the market expected. The unemployment rate rose to 4.3%, the highest level since October 2021.
Inflation is slowing and “further progress” has been made towards the 2% target in recent months, officials said. “Almost all participants agreed that the factors that contributed to recent disinflation are likely to continue to put downward pressure on inflation in the coming months.”
July The US consumer price index released on August 14 (ＣＪＩ), the main index excluding food and energy rose 0.2% from the previous month. On a three-month annualized basis, which reflects a short-term trend, the increase was 1.6%, the slowest growth since February 2021.
Powell could use these recent numbers to argue that a 0.25 percentage point cut in September is unlikely to stimulate inflation. He is scheduled to deliver the keynote address on the 23rd at the Jackson Hole meeting, an annual conference sponsored by the Federal Reserve Bank of Kansas City.
Minutes of the meeting gave little guidance on any changes to the Fed’s continued decline in its balance sheet, saying that officials “have decided that it is appropriate to continue the process of catching up security of the Fed.
Original title:Fed Minutes Show Multiple Case For Cut Rates In July (1)(section)
(Add and update the 5th paragraph on.)
2024-08-21 18:13:00
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