Fed minutes signal a possible December rate cut, focusing on inflation and jobs.

Fed Meeting Minutes Reveal Policy Signals: Rate Cut Expectations and Futures software prompts buying and selling pointsEconomic Assessment

On November 26, local time, the Federal Reserve released the minutes from the Federal Open Market Committee (FOMC) meeting held on November 6-7. The minutes revealed that the Fed might lower the interest rates by 25 basis points during the December policy meeting, adjusting the federal funds rate target range to 4.25% to 4.5%. This decision aims to maintain a robust economy and labor market while further reducing inflation.

Economic Data Drive Policy Adjustments

The meeting minutes showed that in November, the Fed decided to lower the benchmark rate by 25 basis points to a range of 4.5%-4.75%, and indicated that continuing to reduce securities holdings is the appropriate policy direction. The attending members believed that if future data show inflation consistently decreasing towards 2%, and economic activity remains close to maximum employment, it might be reasonable to gradually shift towards a more neutral policy stance.

Inflation and Employment: Dual Policy Focus

The members unanimously agreed that current economic expansion is robust, but the pace of employment growth is slowing, with unemployment rates slightly rising but still at low levels. Meanwhile, inflation is moving towards the 2% target, although it remains slightly above the target level. Against this backdrop, further adjustments in the monetary policy stance are deemed critical for healthy economic development.

Future Outlook: Market Focus on Inflation Path and Policy Prospects

The Federal Reserve emphasized that while achieving sustained economic growth and maintaining a strong labor market, bringing down inflation to the 2% target remains its top priority. Analysts point out that as economic data is released and policy impacts gradually manifest, the Fed's policy path will significantly influence market expectations.

The current wide expectation in the market is that a rate cut in December is a foregone conclusion, but the future policy direction will depend on economic activity, inflation levels, and the dynamic performance of global financial markets. Policymakers need to find a balance between supporting growth and controlling inflation to lay a foundation for long-term economic stability.

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