Skip to main content

A Look at What Newly Released Fed Minutes Reveal - Curt Long NAFCU Chief Economist and VP-Research

Curt will be presenting the state of the economy at our conference in Clearwater Beach from 10/3-6/23

WASHINGTON–Newly released minutes from the Federal Reserve’s most recent meeting shows nearly all of the policymakers supported the decision to continue to slow the pace of interest rate hikes, but also indicated that curbing inflation will remain the “key factor” in how much longer (and how much higher) the rate increases will continue.

The minutes seem to suggest a compromise between those on the Federal Open Market Committee (FOMC) who are worried about a slowing economy and those who are convinced inflation will prove to be persistent, and that the shift to smaller-sized hikes are merited by the inflation data.

Long, Curt

Curt Long

"According to the minutes from the FOMC’s January meeting, several members favored a 50-basis point hike,” said NAFCU Chief Economist and VP-Research Curt Long. “Those members pointed to easing financial conditions after inflation peaked. Given the strength of the labor market and the decent economic returns so far in 2023, there are likely to be several more rate hikes in store." 

Also Worth Highlighting

Long said other points worth highlighting in the minutes include:

  • Some participants judged that recent economic data signaled a somewhat higher chance of continued subdued economic growth, with inflation falling over time to the Committee’s longer-run goal of 2%.
  • Participants agreed that the labor market remained very tight and assessed that labor demand substantially exceeded the supply of available workers.
  • Participants noted that inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path, Long stated.

The Conundrum

The central bank's policy rate is currently in the 4.50%-4.75% range. The FOMC is scheduled to next meet March 21-22 meeting. As CUToday.info has reported, surprisingly strong employment data as well as ongoing strong retail sales have put the Fed in a conundrum about how high to push rates and when to back off.

02/22/2023 CUToday



Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

NCOFCU YouTube Video Minies

  https://www.youtube.com/playlist?list=PLT3lzRTXnHw4YHnT2TzILxP7Rfkjn0eT1  __ ______________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Sunday Reading - 401(k) plans, explained

  Worker Nest Eggs       401(k) plans, explained Originally intended for corporate executives, the 401(k) is now, arguably,   the most famous section of the US tax code   and a staple in worker benefits packages and personal finance guides ( watch 101 ). Roughly 70 million Americans, with a total of more than $7T invested , use these long-term, tax-advantaged accounts to build toward a more secure retirement. Some critics claim that with 401(k) plans, companies offloaded the risk of retirement savings to workers without the training to avoid volatile portfolio mixes. Amid the 2008 financial crisis, many 401(k) plans lost over a quarter of their value , an event that hit those near retirement particularly hard. ... Read our full explainer on the plan...
Post a Comment
Read Complete Article HERE>»

Why credit unions need to be formulating a strategy for crypto & digital...

“The future of money isn’t coming – it’s here, growing at $4 trillion and accelerating,”  DaLand CIO, Jon Ungerland said in a statement. “Their solution ensures the institutions that matter most to American communities don’t miss the transition.” https://www.dalandcuso.com/videos-podcasts __ ______________________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Fed Gets Green Light for Interest Rate Cuts as Unemployment Rate Jumps to 4-Year High

The Federal Reserve is now seen as likely to   cut interest rates   multiple times before the end of the year, following another weak jobs report that showed unemployment jumping to a four-year high. The U.S. economy added just 22,000 jobs in August, less than economists had expected, the  Bureau of Labor Statistics  reported Friday. The unemployment rate rose to 4.3%, up slightly from 4.2% in July but hitting the highest level seen since October 2021, when the economy was still recovering from pandemic-driven layoffs. Although the new jobs report was troubling news for the economy, for prospective homebuyers with secure jobs it likely means further easing in  mortgage rates  in the days to come. Mortgage rates hinge primarily on the yields of  10-year Treasury notes , which plunged Friday to their lowest level since early April, when President  Donald Trump 's Liberation Day tariff announcement sparked panic in financial markets. It signals furth...
Post a Comment
Read Complete Article HERE>»

The Federal Reserve and How it Works

  The Federal Reserve       Background No institution wields more power in US finance than the Federal Reserve—but opinion polls indicate most Americans  don’t know  what it does. Known casually as “the Fed,” the century-old independent central bank sets interest rates, determining how much ordinary people pay for mortgages, car loans, and more, all to achieve its dual mandate of price stability and maximum employment ( read 101 ). Consisting of a central board of governors working in tandem with 12 regional banks, the Fed also manages the US money supply and acts as the lender of last resort. The Origins of the Fed Throughout the 19th century, the US faced  periodic economic downturns , which resulted in financial panics. Customers raced ...
Post a Comment
Read Complete Article HERE>»