International investors closely watch the minutes of the US Federal Open Market Committee (FOMC) meetings
The Federal Reserve shared additional information about the results of its meeting in mid-June through a document called the “minutes,” which was published on July 5.
The minutes reiterated the Federal Reserve’s goal to maintain the federal funds rate, also known as the target interest rate, at a range of 5% to 5.25% in the near future.
The Federal Reserve also expressed its intention to bring the inflation rate back to 2%. The latest publication states that all members are “fully dedicated” to achieving this goal.
To lower interest rates, the Federal Reserve plans to consider factors such as the overall impact of previous tightening of monetary policy, the delayed effects of policy on the economy and inflation, and other relevant developments.
Additionally, the Federal Open Market Committee (FOMC) will decrease the Federal Reserve’s holdings of Treasury securities, agency debt, and agency mortgage-backed securities.
The latest minutes provided more information by stating that nearly all participants agreed it was suitable or acceptable to keep the target rate within the range of 5% to 5.25%.
While all members agreed to maintain the interest rate at the current level, some participants expressed a preference for a 25 basis point increase in the federal funds rate or stated that they would have supported such an increase. They justified this stance based on factors such as a strong job market, positive economic momentum, and limited indications of the inflation rate reaching the Fed’s 2% target.
Possibility of Future Interest Rate Increases:
The recent minutes report included a survey of market participants, which indicated that there were no expected interest rate changes in early 2024. However, respondents expressed a significant likelihood of further tightening occurring in upcoming meetings.
On average, survey respondents estimated a 60% chance that the highest policy rate in the future will be higher than the current target rate.
According to reports from CNBC, the majority of participants within the Federal Reserve (16 out of 18) anticipate the possibility of one more interest rate hike occurring this year.
Typically, higher interest rates are thought to discourage investment in risky assets like cryptocurrencies. However, the recent news has had a minimal impact on the crypto market. Bitcoin (BTC) and other cryptocurrencies have experienced a slight 1% decrease over the past 24 hours.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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