DOLLAR
The Federal Open Market Committee (FOMC) meeting minutes from December 17-18, 2024, provide valuable insights into the Federal Reserve's stance on the economy and monetary policy.
Economic Overview
The US economy has continued to expand at a solid pace, with real GDP growth remaining steady. Labor market conditions have eased slightly, but the unemployment rate remains low at 4.2%
Inflation
Consumer price inflation has decreased, with total PCE price inflation at 2.3% and core PCE price inflation at 2.8% in October. However, inflation remains somewhat elevated
Monetary Policy
The FOMC decided to lower the target range for the federal funds rate by 25 basis points to 4.25%-4.50%. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance
Future Outlook
The FOMC will continue to monitor incoming data and assess the balance of risks. Market participants expect the pace of rate cuts to slow considerably in 2025, with the median respondent expecting 75 basis points of cuts for the full year
Additional Insights
The FOMC minutes also discussed the potential reinstatement of the debt limit in 2025, which could result in substantial shifts in Federal Reserve liabilities. Additionally, the minutes noted that market participants expect central banks in advanced foreign economies to continue reducing their policy rates in 2025 ¹.
Economic Overview
The US economy has continued to expand at a solid pace, with real GDP growth remaining steady. Labor market conditions have eased slightly, but the unemployment rate remains low at 4.2%
Inflation
Consumer price inflation has decreased, with total PCE price inflation at 2.3% and core PCE price inflation at 2.8% in October. However, inflation remains somewhat elevated
Monetary Policy
The FOMC decided to lower the target range for the federal funds rate by 25 basis points to 4.25%-4.50%. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance
Future Outlook
The FOMC will continue to monitor incoming data and assess the balance of risks. Market participants expect the pace of rate cuts to slow considerably in 2025, with the median respondent expecting 75 basis points of cuts for the full year
Additional Insights
The FOMC minutes also discussed the potential reinstatement of the debt limit in 2025, which could result in substantial shifts in Federal Reserve liabilities. Additionally, the minutes noted that market participants expect central banks in advanced foreign economies to continue reducing their policy rates in 2025 ¹.
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