Fed minutes seen as most hawkish in nearly three years

[Federal Reserve, Washington DC, USA]
Jeremy Edwards

The Federal Reserve’s latest meeting minutes [https://seekingalpha.com/news/4573425-fed-officials-see-higher-risk-in-inflation-and-labor-market-while-the-iran-war-clouds-outlook-fomc-minutes] revealed their most hawkish stance since July 2023, reinforcing a market shift away from expectations for rate cuts.

According to SoFi Chief Market Strategist Liz Thomas, most Fed officials now view a rate hike as possible if inflation remains elevated. She added that many also favored removing the easing bias from the policy statement—a notable development suggesting the hawkish push extended beyond the three officials who formally dissented to include broad agreement among non-voters as well.

The minutes arrive as markets already grapple with sticky inflation, higher energy prices and rising sensitivity to any sign the Fed may need to harden its stance. What had appeared to be a debate over when to cut is increasingly becoming a debate over whether the easing bias survives at all.
[Liz Thomas]
Liz Thomas

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