Nov FOMC Minutes Preview: Rebalancing Act (1/3)

MNI's just published our preview for the Minutes to the November FOMC meeting out Tuesday (1400ET/1900UK): PDF is here:

Nov2023FOMCMinutesPrev.pdf

• The Minutes will be scrutinized for further insight into how participants viewed the impact of tighter financial conditions on the outlook, particularly given that they were added to the Statement as a factor that was "likely to weigh on economic activity, hiring, and inflation". (MNI's review of the November meeting is here.)
• The market's take on the implication was that the FOMC effectively saw higher longer-end yields as doing some of the job of potential short-end rate hikes, but the Fed's tightening bias remained, pending incoming data. There will as always be attention paid in the minutes to mentions of participants' criteria to hike further, or alternatively, to be satisfied that rates are sufficiently restrictive to return inflation to target.
• Powell’s November press conference leaned slightly dovish but was overall quite balanced in MNI’s view, reiterating the Committee's tightening bias while setting a fairly high bar to an actual hike.
• While softer-than-expected employment and inflation data since the meeting have firmed market expectations that the Fed will pause for a third consecutive meeting in December, the minutes may strike a more balanced tone, reminding that the fight against inflation is not yet over and the Committee retains a bias towards further tightening.