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The Fed minutes did not say anything about cutting rates

The regularly published detailed minutes from the meetings of US central bankers, known as the “minutes” of the Federal Reserve System (FED), which is reported every three weeks after the last meeting of the Federal Open Market Committee (FOMC), was published this time on Wednesday, November 21. 2023. However, according to the communication of economic correspondents in connection with the financial strategists of investment banks, this latest minutes of the FOMC FED meeting does not contain any information about a possible reduction in interest rates, on the contrary, it expresses very little desire of FOMC members to reduce rates in the near future.

Not only on the basis of this information and facts, the trading trend of the exchange value of the US dollar (USD) changed within the framework of forex trades of the foreign exchange market, when the original investor sentiment counted on a possible reduction in interest rates and the exchange value of the USD decreased. Currently, during the European Wednesday morning on November 22, 2023, at approximately 8:06 CET, the exchange value of the USD measured by the dollar index DXY (US Dollar Currency Index) achieved a daily increase of + 0.18% of its point value at the state in the amount of USD 103.75 points. Thus, on the indicated day and time, the global currency pair of the single European currency Euro (EUR) and the US dollar (USD), as the world’s reserve currency, traded at a mutual exchange rate of 1.0901 USD per EUR, with a daily decrease of the EUR by – 0.0733% exchange rate against USD.

However, even this increase in the exchange value of the USD has for the time being kept the price of investment gold above the threshold of USD 2,000 per troy ounce, when the price of investment gold on the indicated day and time was on the commodity market COMEX (Commodities Exchange Centre) at a value of USD 2,002.10 per troy ounce ounce with a daily increase of +0.02% of its price so far. The minutes of the meeting of the FED (Federal Open Market Committee Federal Reserve System), as a summary of this meeting held on October 31 – November 1, 2023, showed that the members of the Federal Open Market Committee (FOMC) are still worried that inflation could be stubborn or could move higher and therefore more action may be needed from the US Federal Reserve System. At least the Fed’s FOMC central bankers said policy would have to remain “tight” until data showed inflation on a convincing path back to the central bank’s 2% target. “Discussing the policy outlook, FOMC members continued to believe that it was essential that the stance of monetary policy be sufficiently restrictive to allow inflation to return to the 2 percent target over time,” the minutes said.

At the same time, however, the minutes showed that members believed they could move “with caution” and make decisions “about the completeness of incoming information and its implications for the economic outlook, as well as the balance of risks.” , economic correspondents report. However, the minutes of the Fed’s FOMC meeting did not indicate that members even discussed when they might start cutting rates, which was reflected in Fed Chairman Jerome Powell’s post-meeting press conference. “The fact of the matter is that the committee is not thinking about cutting rates at all at this point,” Mr. Powell said at the time. The Fed’s benchmark interest rate, which determines short-term borrowing costs, is currently targeted at a range of 5.25% to 5.5%, the highest level in 22 years. The Fed’s FOMC meeting came amid market concerns about rising Treasury yields, a topic that appeared to generate substantial discussion during the meeting. On the same day, Nov. 1, that the Fed released its post-meeting statement, the Treasury Department announced its borrowing needs over the next few months, which were actually slightly smaller than markets had anticipated, according to economic reporters linked to financial market analysts.

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