20:00 - FOMC Minutes from 28th of October meeting
Key Information:
- "Many" committee members consider a December rate cut as not recommended, while only "several" members are open to a December cut.
- "Most" members see further easing of policy over time, but "not in December."
- "Most" members who are open to a December cut were also willing to vote to maintain rates.
- The minutes emphasize a "Strong difference of opinion" among members regarding a potential December cut.
- The committee does not see evidence of a sharp deterioration in the labor market, although data available during the government shutdown indicated further cooling of the labor market.
- The committee points to heightened economic uncertainty.
- Several committee members expressed the opinion that the current FOMC policy is no longer restrictive.
- The committee also discussed the REPO mechanism, with the head of the unit overseeing the open market operations system expressing the opinion that too much volatility in the system could limit the effectiveness of interest rate policy. The same member also recommended halting the FED's balance sheet reduction policy.
For the markets, the meeting confirms the direction priced in for several weeks. The FOMC is determined to keep rates unchanged in December — but does not announce a revolution and maintains its direction of gradual policy easing. What may be significant for the market in the longer term is the increasingly clear extremity of opinions within the committee regarding cuts, which may or may not result from internal differences of opinion among members regarding the target monetary policy of the US president. At the same time, the question arises whether the FOMC correctly estimates the resilience of the labor market, especially in light of incomplete data resulting from the government shutdown.
The market show no strong movements upon publication, such outcome was likely, already priced in.
EURUSD (M5)
Source: xStation5
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