{"id":2064302,"date":"2023-10-12T02:14:01","date_gmt":"2023-10-12T06:14:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time\/"},"modified":"2023-10-12T02:22:15","modified_gmt":"2023-10-12T06:22:15","slug":"fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time\/","title":{"rendered":"Fed minutes indicate one more rate hike followed by prolonged higher interest rates."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2064302&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<p>Newly released records of discussions \u200bamong \u2062Federal Reserve policymakers reveal their expectations for one more interest rate hike\u2062 before holding rates high for &#8220;some time.&#8221; However, recent surges \u2063in long-term Treasury\u2062 yields may have altered their plans.<\/p>\n<div class=\"my-5\">\n<blockquote>\n<p>Minutes from the \u200dcentral bank&#8217;s most recent\u200b September meeting of\u2063 the \u2062rate-setting Federal \u2062Open\u200d Market Committee (FOMC), <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/fomcminutes20230920.htm\" target=\"_blank\" rel=\"noopener\">released\u200d on Oct. \u206411<\/a>, indicate that a &#8220;majority&#8221; of officials believe \u2062that one more rate hike &#8220;would likely be appropriate&#8221; to bring inflation closer to the Fed&#8217;s 2 percent \u2064target.<\/p>\n<\/blockquote><\/div>\n<p>During the meeting, \u2062FOMC members decided to maintain rates within\u200c a range \u2062of 5.25-5.5 percent\u2014the\u200c highest level in 22 years.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Story<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/china\/chinas-infrastructure-investment-could-tumble-next-experts-5508192?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>China\u2019s Infrastructure Investment Could Tumble Next: Experts<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/11\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/china\/chinas-infrastructure-investment-could-tumble-next-experts-5508192?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"my-5\">\n<blockquote>\n<p>By contrast, &#8220;some\u200b judged\u200b it \u2062likely that no further increases would be warranted,&#8221; the minutes\u2064 read, aligning closely with\u200c market \u2063expectations that <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html?redirect=\/trading\/interest-rates\/countdown-to-fomc.html\" target=\"_blank\" rel=\"noopener\">put the odds<\/a> of\u200c another pause \u200bat the FOMC&#8217;s next meeting in November at over 90 percent.<\/p>\n<\/blockquote><\/div>\n<div class=\"my-5\">\n<p>Prior \u2064to \u2062the \u200drelease of the minutes, a recent surge in longer-dated U.S. Treasurys\u2014which\u2062 made \u200dgovernment borrowing more expensive\u2014led \u200cseveral Fed officials to suggest that the central bank may keep rates unchanged in November.<\/p>\n<h2>Bond Surge \u200din Focus<\/h2>\n<p>Since late July,\u2064 the yield on the benchmark 10-year Treasury note has risen from \u2063around\u200d 4 percent to approximately 4.8\u2062 percent, reaching a 16-year high.<\/p>\n<\/p><\/div>\n<p>Mortgage rates, closely tied to the 10-year Treasury yield, have reached\u2062 7.5 percent,\u2063 a\u2064 23-year high, \u2063according to Freddie Mac.<\/p>\n<div class=\"shortcode post-related-videos\">\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Corporate bond yields have also increased, resulting \u200cin higher borrowing costs for\u2064 businesses.<\/p>\n<p>In a speech to the National Association\u2063 for Business Economics (NABE), Philip Jefferson, vice chair of the Fed&#8217;s board, \u200demphasized the impact \u2064of higher bond rates on future policy decisions.<\/p>\n<p>Lorie Logan, president of the Federal Reserve Bank\u200d of\u2062 Dallas and a voting member of FOMC, stated that market movements in long-term bond rates would \u200dtighten financial conditions and potentially\u200d eliminate the \u2063need for another rate \u2064hike.<\/p>\n<p>Atlanta Federal\u200b Reserve Bank President Raphael Bostic expressed his belief \u200dthat further\u200b interest rate increases are unnecessary, citing the already restrictive monetary policy and the yet-to-be-felt effects of previous rate \u2062hikes.<\/p>\n<p>The minutes from the Fed&#8217;s latest meeting indicated that all <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time\/\" title=\"Fed minutes indicate one more rate hike followed by prolonged <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/janet-yellen-as-congress-for-billions-to-help-other-countries-debt-relief-climate-change-initiatives\/\" title=\"Janet Yellen As Congress For Billions To Help Other Countries\u2019 \u2018Debt Relief,\u2019 \u2018Climate Change\u2019 Initiatives\">higher interest rates<\/a>.&#8221;>rate-setting committee members agreed<\/a>\u2063 on the\u200d need for \u200ca restrictive policy for the foreseeable future, with a \u200dpotential adjustment only when inflation is\u200b sustainably moving towards the 2 percent target.<\/p>\n<div class=\"my-5\">\n<blockquote>\n<p>&#8220;A few participants noted that the pace at which inflation was returning to the Committee&#8217;s 2 \u2062percent goal would influence their views \u2063of the sufficiently restrictive \u2064level of the\u2064 policy\u2062 rate\u2064 and how long to \u2063keep policy restrictive,&#8221; the minutes read.<\/p>\n<\/blockquote><\/div>\n<div class=\"my-5\">\n<p>Following the release of the minutes, Wall Street&#8217;s major indexes experienced a volatile trading session but ultimately closed higher.<\/p>\n<h2>Inflation Reaccelerates<\/h2>\n<\/p><\/div>\n<div class=\"post-figure\">\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>A woman checks items from the refrigerated\u200c section while grocery shopping at a\u200d supermarket in Alhambra, Calif., on July 13, 2022. (FREDERIC\u2062 J. \u2064BROWN\/AFP via Getty Images)<\/figcaption><\/figure>\n<\/p><\/div>\n<div class=\"my-5\">\n<p>The latest price data <a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\" target=\"_blank\" rel=\"noopener\">reveals<\/a> \u200can acceleration \u200bin inflation, with a year-over-year increase of 3.7 percent in August, up from 3.2 percent the previous month. Month-over-month, prices rose by \u20620.6 percent, compared\u2063 to\u200c 0.2 \u200dpercent in\u200c the prior month.<\/p>\n<\/p><\/div>\n<p>Upcoming inflation \u2063data, scheduled for release on Oct. 12, is eagerly anticipated by the markets.<\/p>\n<div class=\"my-5\">\n<p>The Federal Reserve Bank of Cleveland&#8217;s <a href=\"https:\/\/www.clevelandfed.org\/indicators-and-data\/inflation-nowcasting\" target=\"_blank\" rel=\"noopener\">Inflation\u200d Nowcasting<\/a> predicts that September&#8217;s\u200b inflation will match the 3.7 percent pace of August, with \u2063a month-over-month increase of 0.4 percent.<\/p>\n<\/p><\/div>\n<div class=\"my-5\">\n<p>Producer price data <a href=\"https:\/\/www.theepochtimes.com\/article\/surge-in-producer-prices-highlights-reacceleration-in-us-inflation-5508238\" target=\"_blank\" rel=\"noopener\">released on \u2062Oct. \u200b11<\/a> \u200dindicates a year-over-year business cost inflation of 2.2 percent, up from 2.0 \u2064percent the previous month. This serves as a precursor to consumer \u200dinflation.<\/p>\n<\/p><\/div>\n<p>Mark Hamrick, senior economic analyst at Bankrate, expects the upcoming inflation data\u2064 to show a possible modest easing from August&#8217;s 3.7 percent\u200c increase, but still falling \u2063short of \u2064the Federal Reserve&#8217;s\u2064 2 percent target.<\/p>\n<div class=\"my-5\">\n<blockquote>\n<p>&#8220;For consumers\u2062 trying to manage their personal finances amid inflation, the situation with \u200dprices is a\u200c bit like\u200d battling illness. Being past the worst of it isn\u2019t \u2062the same as feeling better or robust,&#8221; he added.<\/p>\n<\/blockquote>\n<h2>Waning Consumer Confidence<\/h2>\n<\/p><\/div>\n<div class=\"post-figure\">\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>People walk along\u200d 5th Avenue in Manhattan, one\u200d of the nation&#8217;s premier shopping streets, in New York City, on Feb. 15, 2023. (Spencer Platt\/Getty Images)<\/figcaption><\/figure>\n<\/p><\/div>\n<div class=\"my-5\">\n<p>In September, consumer confidence reached \u200da four-month low\u200b for \u200cthe \u200bsecond consecutive month, <a href=\"https:\/\/www.conference-board.org\/topics\/consumer-confidence\" target=\"_blank\" rel=\"noopener\">according to<\/a> the Conference Board.<\/p>\n<\/p><\/div>\n<p>Expectations\u2063 regarding\u2063 the \u200deconomic outlook over the next six months fell below the\u200b Conference Board&#8217;s\u200c recession threshold of 80, reflecting declining confidence in business conditions, job availability, and earnings.<\/p>\n<p>Dana\u2062 Peterson,\u200d chief economist at the Conference Board, \u200chighlighted rising prices, particularly for groceries\u2064 and gasoline, as\u200b well as concerns about the political situation and higher interest rates, as factors affecting consumer\u2064 sentiment.<\/p>\n<div class=\"my-5\">\n<p>Former Walmart CEO Bill\u2064 Simon echoed these\u2062 concerns, stating that political polarization, inflation, and high \u2064interest\u2063 rates were undermining \u2062consumer confidence and spending.<\/p>\n<\/p><\/div>\n<p>Consumer spending plays a crucial role in the U.S. economy, \u200baccounting for approximately two-thirds of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-and-republicans-duke-it-out-to-define-the-economy\/\" title=\"Biden and GOP clash over economy definition.\">gross \u200cdomestic product<\/a>.<\/p>\n<\/div>\n<p> <\/p>\n<h2> What are the factors influencing the potential pause in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gdp-growth-unexpectedly-ticks-up-to-2-4-annual-rate-in-second-quarter\/\" title=\"GDP growth unexpectedly rises to 2.4% in Q2.\">interest\u200c rate hikes<\/a> by policymakers?<\/h2>\n<p><span>  Gh. This increase \u2064in long-term Treasury yields has raised concerns among policymakers, \u2063as it could have a negative impact on borrowing costs\u2062 for businesses and consumers.<\/p>\n<p>The minutes released \u2062from the FOMC&#8217;s September meeting indicate that a &#8220;majority&#8221; of officials believe\u200c that one more\u200c interest rate hike would be appropriate to bring inflation closer to\u200b the\u2063 Federal Reserve&#8217;s target of 2 percent. However, there are some \u2064officials who\u200d believe that no further increases would be \u2064necessary.<\/p>\n<p>Market \u2062expectations align \u200cwith the\u2063 latter view, with the \u200dodds of\u2064 another rate hike at the\u200c FOMC&#8217;s next meeting in November estimated to be over 90 percent. This suggests\u200c that policymakers may \u200cpause their rate hike \u2064cycle in light \u200dof recent\u200c bond surges.<\/p>\n<p>One of the\u200b factors influencing \u200cthis\u200c potential pause is the surge in longer-dated \u2064U.S. Treasurys. \u200bThe yield on the benchmark 10-year Treasury note has risen \u200bsignificantly since late July, reaching a 16-year high\u2063 of approximately 4.8\u2064 percent. This increase in yields has made government borrowing more expensive, \u200cprompting some Fed officials to suggest keeping\u200b rates unchanged in \u200cNovember.<\/p>\n<p>The impact of this bond surge extends beyond government borrowing costs.\u200d Mortgage rates, which\u200b are closely tied\u200c to the \u206410-year Treasury yield, have also increased \u200cto\u2062 a 23-year\u2064 high of 7.5 percent. This presents a challenge\u200d for prospective homebuyers and homeowners looking to refinance their\u200c mortgages.<\/p>\n<p>The Federal Reserve is closely monitoring these \u200bdevelopments and their potential \u2063implications for the economy. If borrowing \u200ccosts continue \u2063to \u200drise, it could\u2064 slow down economic activity and \u200cdampen inflationary pressures. By pausing their <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-hedge-fund-ceo-calls-for-fed-to-hit-brakes-on-inflation\/\" title=\"Top Hedge Fund CEO Calls For Fed To Hit Brakes On Inflation\">rate hike cycle<\/a>, policymakers may be aiming to mitigate these risks and ensure steady economic \u200bgrowth.<\/p>\n<p>It is\u200d important to note that the Federal\u200c Reserve&#8217;s decision on interest rates is data-dependent and will be influenced\u2064 by economic indicators \u200cand \u2062trends. As such,\u200b any changes in\u2063 the\u2063 trajectory of long-term Treasury yields and \u200dits impact on borrowing costs will shape the \u200bcentral bank&#8217;s future decisions.<\/p>\n<p>Overall, the newly released records of discussions among Federal Reserve policymakers\u200b provide insight into their expectations for one more interest rate hike before potentially pausing. The recent surge in long-term Treasury yields has\u2064 raised concerns and may\u2062 have altered\u200b their plans. As the\u2064 Federal \u200dReserve continues\u200d to navigate the path of monetary policy, its\u2064 decisions will have\u2063 implications \u2063for borrowing costs, economic growth,\u2063 and\u200b inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>reveal that policymakers anticipate one final rate hike before maintaining high rates for an extended period. However, the recent increase in long-term Treasury yields may have influenced their decision-making process.<\/p>\n","protected":false},"author":118,"featured_media":2064303,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2064302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2064302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/118"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2064302"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2064302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2064303"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2064302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2064302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2064302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}