The minutes of the September meeting of the Federal Reserve, which was announced today, may be one of the most important sources of economic information to be announced this week.
The minutes confirmed the information and statements issued immediately after the conclusion of the meeting, as well as news from a press conference with questions answered by Federal Reserve Chairman Jerome Powell. However, the minutes of the meeting showed the reserve council more aggressive than usual.
The minutes confirmed the information that the US economy is on a strong path to growth. This economic growth may also include further gradual interest rate increases.
There are, however, key aspects not included in any information released either last month or verbally by President Jerome Powell at his press conference held immediately after the meeting.
These new pieces of information contain more powerful terms or concepts than previously mentioned, and it was suggested that members of the Federal Reserve would move to a more rigid stance on their monetary policy.
First, although the Federal Reserve has already indicated that further interest rate hikes will come, removing the word “accommodative” to describe the current monetary policy would be appropriate. For the first time, the word will be replaced by another one – “restrictive”.
Second, during the meetings they talked about the real probability that interest rates would need to exceed the expected rate, which is believed to have been set at around 3%.
In the United States, central bankers discussed raising interest rates soon as an attempt to face excessive economic strength, but they also studied how global trade disputes could affect US businesses and families, as the minutes of the Fed’s latest policy meeting showed on Wednesday.
Statistics released in the FOMC meeting minutes last month indicate that the Fed is taking a much tougher stance than expected before this information was released. The addition of the word “restrictive” to the current monetary policy description was much more aggressive than just stating that the Fed was moving interest rates to a normalization period.
Also, for the first time, the Fed suggested that it may move interest rates higher than the perceived target of 3%. Both factors support the strength of the dollar and may put additional pressure on precious metal prices in the coming weeks.