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Federal Reserve:Meetings/2023 February 01: Difference between revisions
Federal Reserve:Meetings/2023 February 01 (view source)
Revision as of 21:20, 1 February 2023
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== Meeting Results == | == Meeting Results == | ||
The FED decided to do a rate hike of 0.25 bps, to raise the target range for the federal funds rate to 4.5% to 4.75%. The market reacted positively to the release, due to hopes | The FED decided to do a rate hike of 0.25 bps, to raise the target range for the federal funds rate to 4.5% to 4.75%. The market reacted positively to the release, due to hopes that inflation is coming down and the FED rate hike cycle is near the end. <ref>https://www.federalreserve.gov/monetarypolicy/files/monetary20230201a1.pdf</ref> | ||
'''Notes:''' | '''Notes:''' | ||
* They consider they need to remain restrictive for some time, 2 more rate hikes could be | * They consider they need to remain restrictive for some time, 2 more rate hikes could be appropriate for now. | ||
* Financial conditions over the long term is their focus, not short term movements. | * Financial conditions over the long term is their focus, not short term movements. | ||
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* Disinflation has been on the goods sector in current data, and housing inflation expected to slow in second half of 2023. | * Disinflation has been on the goods sector in current data, and housing inflation expected to slow in second half of 2023. | ||
* Services ex housing is still | * Services ex housing is still not seeing disinflation, which means more job need to be done. Need better labor market balance to achieve it. | ||
* Going dorward rate hikes will be data dependent. | * Going dorward rate hikes will be data dependent. | ||
* Accross yield curve, real rates are now positive which is | * Accross yield curve, real rates are now positive which is restrititve. Still considering how restrictive is enough. | ||
* Powell consider path to soft landing is | * Powell consider path to soft landing is posisble. That is their base case. | ||
== Assessment == | == Assessment == | ||