The Fed’s minutes: what to look out for

Today, on November 23, the U.S. Federal Reserve’s (Fed’s) minutes of the previous meeting are to be released. Analysts at Canadian bank, Scotiabank, highlighted three key moments, which are worth looking out for.

First, there is a need to focus on the bank representatives’ discussion about the interest rate size. It’s important to determine whether Fed Chairman Jerome Powell's forecast for a likely upward revision of the terminal rate at the upcoming meeting in December will be supported. Also, the range of opinions on this matter need to be estimated in accordance with the Fed’s frequency of citations language (one, a couple, a few, some, many, most, all, etc.).

The next moment, which needs to be noticed, is how often there has been an opinion among officials about slowing down the pace of rate hikes, as well as when that might happen. Powell previously stated that this slow down might take place rather soon. Meanwhile, markets expect that the pace of rate hikes will lower to 50 basis points in December, therefore, they remain quite vulnerable to signs of a more serious increase.

Finally, it’s also important to take into account the fact that the Fed might fully reject the idea of slowing down the U.S. monetary policy tightening, since easing measures might be considered premature amid the current inflation.