Fed proceeding 'carefully' Fed proceeding 'carefully' http://www.federatedinvestors.com/mmdt/static/images/mmdt/mmdt-logo-amp.png http://www.federatedinvestors.com/mmdt/daf\images\insights\article\mmdt-weekly-Small.jpg November 22 2023 November 27 2023

Fed proceeding 'carefully'

Weekly Cash Commentary

Published November 27 2023

Federal Reserve policymakers still view inflation suspiciously. Minutes from the Nov. 1 Federal Open Market Committee (FOMC) indicate they don’t trust that the downward trend of the various measures will continue. Saying they need to proceed 'carefully,' "Participants noted that further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee's inflation objective was insufficient.” In short, hope is not a policy.

That means that policymakers aren’t satisfied with the steady weakening economic data. Last week, the Conference Board reported softer leading economic indicators for October and the Chicago Fed national activity index disapointed. Consumer sentiment continued to slip in November, according to the University of Michigan, with inflation expectations for 2024 actually increasing. While the December FOMC meeting very likely won’t produce a rate hike, the Fed appears far from considering cuts.

Tags Markets/Economy . Liquidity .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

The Chicago Fed National Activity Index is a gauge the level of economic activity in the United States.

The Conference Board's Composite Index of Leading Economic Indicators is published monthly and is used to predict the direction of the economy's movements in the months to come.

The University of Michigan Consumer Sentiment Index is a measure of consumer confidence based on a monthly telephone survey by the University of Michigan that gathers information on consumer expectations regarding the overall economy.

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