The Federal Reserve released the minutes from its latest meeting Wednesday, providing more clues about the central bank’s approach on inflation and interest rate hikes.
“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.”
Markets widely expect the Fed to step down to a 0.5 percentage point increase in December, following four straight 0.75 percentage point hikes.
After raising rates by three-quarters of a percentage point at its November 2 meeting, the Fed’s chair Jerome Powell suggested that the Central bank may soon begin to slow the pace of hikes.
Wednesday minutes showed that several other Fed policymakers agreed with Powell’s assessment.
The Fed added that “a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.”
Markets had been looking for clues about how far policymakers think they’ll have to go next year to make satisfactory progress against inflation that is still at the highest levels in almost 40 years.
As recession fears seem to be fading away, some experts are growing concerned that big increases could eventually slow the economy leading to higher unemployment and job losses.