Fed minutes show unity on cautious approach to future rate hikes

livemint.com:

Federal Reserve policymakers at their most recent meeting united around a strategy to “proceed carefully" on future interest-rate moves and base any further tightening on progress toward their inflation goal. “All participants agreed that the committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information," according to minutes of the Oct.

31-Nov. 1 Federal Open Market Committee meeting released in Washington Tuesday.

At the meeting, US central bankers held the benchmark lending rate in a range of 5.25% to 5.5% for the second straight time, despite a run of data showing strong consumption and hiring, which fueled overall economic growth. The minutes show the committee was willing to take a patient approach toward inflation while making future policy decisions dependent on incoming statistics.

Also Read | Bank of America sees S&P 500 hitting record 5,000 by the end of 2024 “Participants expected that the data arriving in coming months would help clarify the extent to which the disinflation process was continuing, aggregate demand was moderating in the face of tighter financial and credit conditions, and labor markets were reaching a better balance between demand and supply," the minutes stated. Fed officials gathered in Washington for the meeting after a bond rout pushed yields on US government 10-year Treasuries over 5%, the highest in 16 years.

The increase in longer-term borrowing costs startled some officials, who said tightening financial conditions were doing the work of additional rate hikes. “Participants highlighted that longer-term yields could be volatile and that the factors behind the recent increase, as well as