Minutes from the FOMC meeting that took place in November have just been released. The publication did not bring much surprise. FOMC Minutes did not present any new information regarding further steps that the FED intends to take regarding fiscal policy. Investors were hoping for more clues on the central bank tapering plans and especially what exactly are criteria for accelerating QE taper, however today's publication did not provide any additional information.
Here are key takeaways from the document:
- Significant price increases in some sectors due to supply problems
- Inflation prospects raised higher
- If inflation remains high, the Fed should adjust the pace of QE and decide whether to rate hikes
- The Fed sees strong growth in 2022
- Some Fed members were in favor of faster tapering, which would enable an earlier interest rate increase
- The Fed believes that prices may remain high for longer
Generally, no big surprise. It can be seen that in the case of further inflation problem and good macroeconomic data, we should expect further actions from the Fed. Therefore, it is possible that the decision to accelerate the tapering will be made at the next Fed meeting. However, the volatility in the markets is very limited, which may also be related to the fact that we have a day off in the US tomorrow.
The market reaction to today's FOMC Minutes is negligible. EURUSD is testing earlier broken 1.12 level which coincides with lower limit of the wedge formation. Source:xStation5 .