New FOMC Meeting Minutes Released Today

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

The FOMC meeting minutes were just released, and we’ve found the most important information that investors need to know now.

The data will be sifted through for days, but here’s what we know so far from theFOMC meeting minutes…

Keys to Today’s FOMC Meeting Minutes

  • The September FOMC meeting minutes show that the Fed believes it should raise rates “relatively soon.”
  • It was a close call regarding the decision on an interest rate hike last month. There were reasonable arguments for raising rates in September, but central bank members wanted to wait for more information.

Don’t Miss: This is your ticket to bigger profits… and it’s totally free. Here’s everything you need to know. Read more… 

  • Overall economic risks were weighted to the downside, providing the Fed with reasons to keep rates low. Some of the biggest reasons remain the uncertainty of foreign economies, concerns about the Brexit, and lacking global economic growth. FOMC members said they will also keep watching inflation closely.
  • Price inflation came in about as expected last month. The Fed continues to anticipate that headline inflation will rise over the medium term to its 2% objective. However, 12-month core PCE price inflation has remained below 2%.
  • The markets were also a factor. While volatility was relatively low over much of the period, volatility increased heading into the meeting as market participants’ views about monetary policy actions by the Fed and global central banks shifted.
  • Flat retail sales in August were a concern.
  • Mixed housing activity was another concern expressed in the FOMC minutes. Starts for new single-family homes declined in July and August, as did starts for multifamily units. Building permits for new single-family homes, which tends to be a good indicator of the underlying trend in construction, was flat in recent months and was essentially flat year over year.
  • Real state and local government purchases were also flat.
  • Several Fed members said that having rates low for so long may be encouraging excessive borrowing and increased leverage in the nonfinancial corporate sector.
  • One Fed member said these low interest rates could encourage pension funds, endowments, and investors with fixed future payout obligations to save more. That would depress economic growth.
  • Several FOMC members appear worried that by not raising rates, the Fed is ruining its credibility. They say this is especially true given that recent economic data had largely corroborated the Committee’s economic outlook.

The Fed last raised rates in December 2015, after holding them near zero for several years after the 2008 financial crisis. But the move sent ripples through markets, with the Dow falling 10% in the following six weeks.

The central bank will see two more employment reports before its December meeting. By then, the Fed could have enough data to be satisfied that a rate increase is warranted.

Market odds of a rate hike in December stood at 64% after the minutes’ release, unchanged from yesterday’s read.

Urgent: How Negative Interest Rates Will Finally Kill America’s Free Market


To get full access to all Money Morning content, click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and visitors become smarter, more confident investors.

Disclaimer: © 2016 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.


The post New FOMC Meeting Minutes Released Today appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases I receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.