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Here come the Fed minutes ...

Aug 26, 2024, 16:09 IST
APThe Federal Reserve will release minutes of its June meeting at 2 p.m. ET.

Members of Federal Open Market Committee voted at that meeting to raise interest rates.

The hawks on the FOMC who think the economy can withstand higher interest rates considered weak inflation as transitory. Although inflation has only touched the Fed's 2% target once since 2012, the personal consumption expenditures index, which the Fed prefers to use to track price changes, has actually been dropping on a year-over-year basis this year.

This has raised the stakes in the ongoing debate on whether the Fed should change its inflation target or reconsider how quickly it raises interest rates.

Meanwhile, the Fed is getting ready to unleash another tool besides rate hikes: paring down its balance sheet. To shrink the nearly $5 trillion balance sheet, the Fed said in June that it plans to gradually allow a fixed amount of the assets it owns to roll off without reinvestment, and raise the caps every three months.

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