Federal Reserve signals prolonged restrictive stance, open door to potential rate cuts in 2024

In their December meeting, Federal Reserve policymakers signalled a commitment to maintaining a restrictive stance "for some time," anticipating a peak in the policy rate. The minutes revealed an increased optimism about inflation progress, hinting at a potential rate cut in 2024. Despite a unanimous decision to hold rates steady, officials acknowledged a willingness to adjust if inflation moderates. The "dot plot" highlighted varying expectations, while the shift in tone and updated outlook fuelled a market rally. The next FOMC meeting on Jan. 30-31 will be closely watched for policy discussions.

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Fed Sees Rates Staying High for Some Time With Cuts Eyed in 2024

By Craig Torres

Federal Reserve policymakers agreed last month that it would be appropriate to maintain a restrictive stance "for some time," while acknowledging they were probably at the peak rate and would begin cutting in 2024.

"Participants viewed the policy rate as likely at or near its peak for this tightening cycle," according to the minutes of the Dec. 12-13 Federal Open Market Committee meeting released Wednesday.

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