Fed Minutes Indicate Rate Increases Now on Hold; Cut Could Come in 2024

WASHINGTON–While Federal Reserve officials indicated they remain open to the possibility of again raising rates, minutes released from the Fed’s October meeting show they are more likely to keep rates steady--and one credit union economist sees potential for a rate cut in 2024.

“All participants agreed that the committee was in a position to proceed carefully,” said the minutes of the Oct. 31-Nov. 1 meeting state. “Participants expected that the data arriving in coming months would help clarify the extent to which” a slowdown in inflation was continuing amid higher borrowing costs, according to the minutes. 

The Fed’s Open Market Committee is set to meet again on Dec. 12-13, but few expect any rate increase to be considered. 

"The minutes from the October FOMC meeting reaffirm that the committee believes monetary policy is currently restrictive,” said NAFCU VP-Research Curt Long. “Given the significant moderation in inflation in 2023, NAFCU believes the FOMC is done raising rates in this cycle and will proceed with the first rate cut in the first half of 2024." 

Other Risks 

The minutes indicate the Fed sees risks in raising rates too much, even as inflation appears to be moderately cooling.

The Fed last raised rates in July, when they increased the benchmark federal-funds rate in July to a range between 5.25% and 5.5%, a 22-year high. That’s up from near zero in March of 2022 when the Fed began raising rates.