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Summary Points On FOMC Minutes

  • The main hawkish angle relative to a dovish presser came from: “Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy”
  • However, two officials favored holding rates steady (or could have supported such a proposal) and “several” saw a need to consider the risk of overtightening financial conditions.
  • “A number of participants judged that, with the stance of monetary policy in restrictive territory, risks the achievement of Fed goals had become more two sided.”
  • Continued data dependency for September: “[participants] agreed that policy decisions at future meetings should depend on the totality of the incoming information and its implications for the economic outlook and inflation as well as for the balance of risks.”
  • Supercore inflation developments: “several participants commented that significant disinflationary pressures had yet to become apparent in the prices of core services excluding housing.” Similar to June’s: “some participants remarked that core nonhousing services inflation had shown few signs of slowing in the past few months.”
  • QT beyond rate cuts: "A number of participants noted that balance sheet runoff need not end when the Committee eventually begins to reduce the target range for the federal funds rate."
  • Potential hints of downward revision to SEP u/e rate: staff “a small increase in the unemployment rate relative to its current level” as they “continued to expect that real GDP growth in 2024 and 2025 would run below their estimate of potential output”. The 4.1% forecast for 4Q23 looks increasingly incompatible with latest rate of 3.5%.

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