Fed minutes indicate possible rate peak in 2023

The FOMC minutes show that the Fed sees a slowing of inflation, which may support a peak in the federal funds rate this year.

However, the minutes were penned before notable data. January's jobs report was strong, showing an increase of 517,000 in nonfarm payrolls. Inflation was also higher than consensus, with the headline CPI printing at 0.5% m/m.


Source: www.tradingview.com

Fed Funds Futures have altered shape since the data releases. Its terminal rate has been pushed back from June and now occupies August and September (red columns). The futures have also flattened for the second half, suggesting that the higher for longer mantra is pricing in.

Fed officials sound more hawkish since the Feb meeting. Fed Chair Powell has reiterated it will take time for monetary policy to take effect and Fed President's Mester and Bullard (non-voting members) have suggested a potential 50bps for next month.

Friday sees the next piece of the puzzle when core PCE, the Fed's preferred measure of inflation, will be released.

Trade the News: View our Economic Calendar

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.