Markets.com Logo
euEnglish
LoginSign Up

Fed Minutes Signal More Hikes

Feb 23, 2023
3 min read
Table of Contents

    Hikes Continue in the US 

    5% for one year. No wonder stocks are under pressure when the 1yr Treasury note yields more than 5.1%, its highest in 22 years. FOMC minutes signalled more rate hikes – and remember those minutes were before the hot data that hit the bull rally in recent days.   

      

    Is it Working? 

    Minutes detailed that "while there were recent signs that the cumulative effect of the Committee’s tightening of the stance of monetary policy had begun to moderate inflationary pressures, inflation remained well above the Committee’s longer-run goal of 2 percent and the labor market remained very tight... Against this backdrop, and in consideration of the lags with which monetary policy affects economic activity and inflation, almost all participants agreed that it was appropriate to raise the target range of the federal funds rate 25 basis points...  

     

    Some Looking for Even Further Action 

    Many of these participants observed that a further slowing in the pace of rate increases would better allow them to assess the economy’s progress". "A few" wanted to raise rates by 50bps as it would "more quickly bring the target range close to the levels they believed would achieve a sufficiently restrictive stance”, whilst “a number of participants observed that financial conditions had eased in recent months, which some noted could necessitate a tighter stance of monetary policy."   

      

    Inflationary Pressure Driving the Car 

    I think it’s noteworthy that the minutes showed members are worried about the easing of financial conditions that has taken place and warned that inflation was still way too high, at the same time as Jay Powell said financial conditions had tightened and declared disinflation was now the order of the day. It’s all very higher for longer. Meanwhile St Louis Fed president James Bullard said the market was over pricing risk of recession, and that the Fed should only slow down once it’s hit the terminal rate.  

    It can’t go on forever – American consumers are loading up on debt rather than cutting back, only making problems worse when it does all burst – an even bigger and more damaging recession could be on the way.  

      

     

    Equity in Europe Mixed

    A mixed start for European equity markets on Thursday morning – London down a bit more, Frankfurt higher by around half a percent. A slew of earnings from FTSE 100 companies saw Rolls-Royce soar 16% after reporting a 57% jump in profits and the new CEO signalled a 7-point plan for restructuring. Anglo American shares fell slightly after it took a $1.7bn writedown on its UK fertilizer mine. BAE Systems was also down despite a nearly 10% rise in underlying profits and a record year for new orders of £37bn. WPP rose 4% after it said revenues would grow 3-5% in 2023, although this is down from 7% in 2022.  

     


    Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.

    Neil Wilson
    Written by
    Neil Wilson
    SHARE

    Markets

    • Palladium - Cash

      chartpng

      --

      3.15%
    • EUR/USD

      chartpng

      --

      -0.28%
    • Cotton

      chartpng

      --

      0.03%
    • AUD/USD

      chartpng

      --

      0.89%
    • Santander

      chartpng

      --

      -2.48%
    • Apple.svg

      Apple

      chartpng

      --

      0.53%
    • easyJet

      chartpng

      --

      -0.03%
    • VIXX

      chartpng

      --

      -2.63%
    • Silver

      chartpng

      --

      1.90%
    Tags DirectoryView all
    Table of Contents

      Related Articles

      Stock market today: Nasdaq rallied to new highs as Nvidia hits $4T valuation

      Stock market today: the Nasdaq Composite Index surged to new highs today, fueled primarily by Nvidia’s unprecedented achievement of reaching a $4 trillion market valuation.

      Ghko B|1 day ago

      Datadog (DDOG) Joins S&P 500: What’s the Datadog stock price target in 2025?

      Datadog (DDOG) Joins S&P 500: Datadog, a leading provider of monitoring and analytics for cloud-scale applications, recently achieved a significant milestone by joining the S&P 500.

      Ghko B|1 day ago

      Morning Note: Stocks Hold as Fed Cautious; Bitcoin Soars; RBA CBDC Trials

      U.S. stocks held their ground after the release of the Federal Reserve’s minutes from its June 17–18 meeting, which revealed that only a few officials anticipated rate cuts as early as this month.

      Tommy Yap|1 day ago
      Markets.com Logo
      google playapp storeweb tradertradingView

      Contact Us

      support@markets.com+12845680155

      Markets

      • Forex
      • Shares
      • Commodities
      • Indices
      • Crypto
      • ETFs
      • Bonds

      Trading

      • Trading Tools
      • Platform
      • Web Platform
      • App
      • TradingView
      • MT4
      • MT5
      • CFD Trading
      • CFD Asset List
      • Trading Info
      • Trading Conditions
      • Trading Hours
      • Trading Calculators
      • Economic Calendar

      Learn

      • News
      • Trading Basics
      • Glossary
      • Webinars
      • Traders' Clinic
      • Education Centre

      About

      • Why markets.com
      • Global Offering
      • Our Group
      • Careers
      • FAQs
      • Legal Pack
      • Safety Online
      • Complaints
      • Contact Support
      • Help Centre
      • Sitemap
      • Cookie Disclosure
      • Regulation
      • Awards and Media

      Promo

      • Gold Festival
      • Crypto Trading
      • marketsClub
      • Welcome Bonus
      • Loyal Bonus
      • Referral Bonus

      Partnership

      • Affiliation
      • IB

      Follow us on

      • Facebook
      • Instagram
      • Twitter
      • Youtube
      • Linkedin
      • Threads
      • Tiktok

      Listed on

      • 2023 Best Trading Platform Middle East - International Business Magazine
      • 2023 Best Trading Conditions Broker - Forexing.com
      • 2023 Most Trusted Forex Broker - Forexing.com
      • 2023 Most Transparent Broker - AllForexBonus.com
      • 2024 Best Broker for Beginners, United Kingdom - Global Brands Magazine
      • 2024 Best MT4 & MT5 Trading Platform Europe - Brands Review Magazine
      • 2024 Top Research and Education Resources Asia - Global Business and Finance Magazine
      • 2024 Leading CFD Broker Africa - Brands Review Magazine
      • 2024 Best Broker For Beginners LATAM - Global Business and Finance Magazine
      • 2024 Best Mobile Trading App MENA - Brands Review Magazine
      • 2024 Best Outstanding Value Brokerage MENA - Global Business and Finance Magazine
      • 2024 Best Broker for Customer Service MENA - Global Business and Finance Magazine
      LegalLegal PackCookie DisclosureSafety Online

      Payment
      Methods

      mastercardvisanetellerskrillwire transferzotapay
      The markets.com/za/ site is operated by Markets South Africa (Pty) Ltd which is a regulated by the FSCA under license no. 46860 and licensed to operate as an Over The Counter Derivatives Provider (ODP) in terms of the Financial Markets Act no.19 of 2012. Markets South Africa (Pty) Ltd is located at BOUNDARY PLACE 18 RIVONIA ROAD, ILLOVO SANDTON, JOHANNESBURG, GAUTENG, 2196, South Africa. 

      High Risk Investment Warning: Trading Foreign Exchange (Forex) and Contracts For Difference (CFDs) is highly speculative, carries a high level of risk and is not appropriate for every investor. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please read the full  Risk Disclosure Statement which gives you a more detailed explanation of the risks involved.

      For privacy and data protection related complaints please contact us at privacy@markets.com. Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.

      Markets.com operates through the following subsidiaries:

      Safecap Investments Limited, which is regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license no. 092/08. Safecap is incorporated in the Republic of Cyprus under company number ΗΕ186196.

      Finalto International Limited is registered  in the Saint Vincent and The Grenadines (“SVG”) under the revised Laws of Saint Vincent and The Grenadines 2009, with registration number  27030 BC 2023.

      Close
      Close

      set cookie

      set cookie

      We use cookies to do things like offer live chat support and show you content we think you’ll be interested in. If you’re happy with the use of cookies by markets.com, click accept.