原文標題：
Fed officials see smaller rate hikes coming ‘soon,’ minutes show
原文連結：
https://www.cnbc.com/2022/11/23/fed-minutes-november-2022.html
發布時間：
PUBLISHED WED, NOV 23 20222:00 PM EST
記者署名：
Jeff Cox
原文內容：
Federal Reserve officials earlier this month agreed that smaller interest
rate increases should happen soon as they evaluate the impact policy is
having on the economy, meeting minutes released Wednesday indicated.
Reflecting statements that multiple officials have made over the past several
weeks, the meeting summary pointed to small rate hikes are coming. Markets
widely expect the rate-setting Federal Open Market Committee to step down to
a 0.5 percentage point increase in December, following four straight 0.75
percentage point hikes.
Though hinting that smaller moves were ahead, officials said they still see
little signs of inflation abating. However, some committee members expressed
concern about risks to the financial system should the Fed continue to press
forward at the same aggressive pace.
“A substantial majority of participants judged that a slowing in the pace of
increase would likely soon be appropriate,” the minutes stated. “The
uncertain lags and magnitudes associated with the effects of monetary policy
actions on economic activity and inflation were among the reasons cited
regarding why such an assessment was important.“
The minutes noted that the smaller hikes would give policymakers a chance to
evaluate the impact of the succession of rate hikes.
The summary noted that a few members indicated that “slowing the pace of
increase could reduce the risk of instability in the financial system.”
Others said they’d like to wait to ease up on the pace. Officials said they
see the balance of risks on the economy now skewed to the downside.
Markets had been looking for clues about not only what the next rate hike
might look like but also for how far policymakers think they’ll have to go
next year to make satisfactory progress against inflation.
Officials at the meeting said it was just as important for the public to
focus more on how far the Fed will go with rates “and the evolution of the
policy stance thereafter, had become more important considerations for
achieving the Committee’s goals than the pace of further increases in the
target range.“
In recent days, officials have spoken largely in unison about the need to
keep up the inflation fight, while also indicating they can pull back on the
level of rate hikes. That means a strong likelihood of a 0.5 percentage point
increase in December, but still an uncertain course after that.
Markets expect a few more rate hikes in 2023, taking the funds rate to around
5%, and then possibly some reductions before year end.
The post-meeting statement from the rate-setting Federal Open Market
Committee added a sentence that markets interpreted as a signal that the Fed
will be doing smaller increases ahead. That sentence read, “In determining
the pace of future increases in the target range, the Committee will take
into account the cumulative tightening of monetary policy, the lags with
which monetary policy affects economic activity and inflation, and economic
and financial developments.“
Investors saw it as a nod to a reduced intensity of hikes following four
straight 0.75 percentage point increases that took the Fed’s benchmark
borrowing overnight borrowing rate to a range of 3.75-4%, the highest in 14
years.
Several Fed officials have said in recent days that they anticipate a likely
half-point move in December.
“They’re getting to a point where they don’t have to move so quickly. That
’s helpful since they don’t know exactly how much tightening they’re going
to have to do,” said Bill English, a former Fed official now with the Yale
School of Management. “They emphasize policy works with lags, so it’s
helpful to be able to go a little bit more slowly.“
Inflation data lately has been showing some encouraging signs while remaining
well above the central bank’s 2% official target.
The consumer price index in October was up 7.7% from a year ago, the lowest
reading since January. However, a measure the Fed follows more closely, the
personal consumption expenditures price index excluding food and energy,
showed a 5.1% annual rise in September, up 0.2 percentage points from August
and the highest reading since March.
Those reports came out after the November Fed meeting. Several officials said
they viewed the reports positively but will need to see more before they
consider easing up on policy tightening.
The Fed has been the target lately of some criticism that it could be
tightening too much. The worry is that policymakers are too focused on
backward-looking data and missing signs that inflation is ebbing and growth
is slowing.
However, English expects the Fed officials to keep their collective foot on
the break until there are clearer signals that prices are falling. He added
that the Fed is willing to risk a slowing economy as it pursues its goal.
“They have risks in both directions if doing too little and doing too much.
They’ve been fairly clear that they view the risks of inflation getting out
of the box and the need to do a really big tightening as the biggest risk,”
he said “It’s a hard time to be Jay Powell.”