Minutes of the Federal Reserve Meeting - November 2024

Here are the main points from the minutes of the U.S. Federal Reserve meeting, issued today, Wednesday:

• In their discussion of monetary policy at this meeting, members of the U.S. Federal Reserve noted that inflation has made progress towards achieving the committee's goal, but it remains somewhat elevated.
• Participants noted that recent indicators suggest that economic activity continued to expand at a strong pace, that labor market conditions have generally improved since earlier in the year, and that while the unemployment rate has risen, it remains low.
• Almost all members of the U.S. Federal Reserve observed that the risks to achieving the committee's objectives in the labor market and inflation were roughly balanced.
• In support of the committee's goals, Federal Reserve members deemed it appropriate to lower the target range for the federal funds rate by 25 basis points.
• Participants noted that the rate cut and the adjustment in the monetary policy stance would help sustain the strength of the economy and labor market while continuing to enable further progress on inflation.
• Participants also believed it was appropriate to continue the process of reducing the Federal Reserve's holdings of securities.
• In discussing the outlook for monetary policy, participants anticipated that if data came in as expected, with inflation continuing to move sustainably toward 2% and the economy remaining near full employment, it would likely be appropriate to gradually move toward a more neutral monetary policy stance over time.
• Federal Reserve members pointed out that monetary policy decisions are not made according to a pre-set path and are conditioned on the evolution of the economy, the implications for economic forecasts, and the balance of risks; they emphasized that it would be important for the committee to clarify this as it adjusts its stance on monetary policy.
• Many participants stressed that monetary policy will depend on economic data and pointed out the volatility of recent economic data, highlighting the importance of focusing on underlying economic trends and evolving forecasts when evaluating incoming information.
• In discussing considerations related to managing risks that may affect the outlook for monetary policy, almost all participants agreed that the risks to achieving the committee's goals in the labor market and inflation remain roughly balanced.
• Some participants believed that the downside risks to economic activity or the labor market had diminished.
• Federal Reserve members indicated that monetary policy must balance the risks of easing too quickly, which could hinder further progress on inflation, and the risks of easing too slowly, which could weaken economic activity and employment inappropriately.
• In discussing the stance of monetary policy in response to potential shifts in the balance of risks, some Federal Reserve members indicated that the committee may temporarily halt interest rate cuts and keep them at restrictive levels if inflation remains high, while others noted that policy easing could accelerate if the labor market weakens or economic activity stalls.
• Federal Reserve members also observed that the uncertainty regarding the neutral interest rate level has complicated the assessment of the degree of monetary policy tightness, and in their view, it has made it appropriate to gradually reduce policy constraints.