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The majority of the Fed members, in the latest monetary policy meeting, indicated a policy rate cut in the September meeting, stated the Fed minutes released on Wednesday.
In the latest meeting held on July 30-31, 2024, the Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 5.25 to 5.5 per cent. "The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting" stated the Fed minutes. The Fed members during the meeting also noted that the U.S. economy shows signs of solid growth, albeit at a slower pace compared to 2023. The committee noted that while job gains have moderated, the unemployment rate remains at 4.1 per cent, indicating a resilient labor market. "In their discussions of monetary policy for this meeting, members agreed that economic activity had continued to expand at a solid pace. Job gains had moderated, and the unemployment rate had moved up but remained low" said the minutes. The Fed minutes also added that the financial conditions have experienced a modest easing, with long-term interest rates declining and equity prices on the rise. This shift in financial dynamics has prompted discussions among committee members about the potential for further easing of monetary policy in the future, contingent on economic conditions. The Fed mentioned that the participants of the meeting observed that inflation had eased over the past year but remained elevated and that, in recent months, there had been some further progress toward the Committee's 2 per cent inflation objective. Market participants and analysts are keenly observing the FOMC's actions, as they will significantly influence consumer spending, investment strategies, and overall economic sentiment in the months ahead. The Fed minutes also informed that the next meeting of the committee will be held on Tuesday-Wednesday, September 17-18, 2024. (ANI)
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