🏦 The Fed isn’t ready to declare victory on inflation just yet.
Yesterday’s FOMC minutes showed that most Fed officials believe another interest-rate hike could be appropriate before the end of 2026.
Key takeaways:
🔥 Inflation remains the primary concern, with officials generally seeing risks tilted to the upside.
📈 Several policymakers believe the current policy rate is either not restrictive or only mildly restrictive.
💼 The labor market was viewed as broadly stable and close to maximum employment.
🇺🇸 Economic activity continues to expand at a solid pace, supported by resilient consumer spending and strong business investment.
🤖 Interestingly, the AI investment boom was highlighted as both a major driver of economic activity and a potential source of additional inflationary pressure.
The September meeting resulted in a unanimous 25bp hike to 3.75%-4.00%, but yesterday’s minutes make one thing clear: the tightening cycle may not be finished.
For investors, the equation remains straightforward:
Inflation ↓ = less pressure on the Fed
Inflation stays sticky = higher-for-longer, with another hike still on the table
That keeps upcoming inflation, employment and growth data firmly in focus ahead of the October 27-28 FOMC meeting.
The big question now: Does the Fed hike again before year-end, or have we already seen the final move?
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