The Federal Open Market Committee (FOMC) released the Minutes of the December meeting, and the document showed that most participants are willing to deliver additional rate cuts if inflation declines over time. The document showed that economic growth is projected to move modestly faster than at the October meeting.
Key Quotes
- Most participants judged further rate cuts would likely be appropriate if inflation declined over time as expected.
- Some of those who supported cutting rates indicated the decision was finely balanced, or they could have supported leaving rates unchanged.
- Most participants supported lowering the Fed funds rate, though some preferred leaving rates unchanged.
- Some participants suggested that under their economic outlooks, it would likely be appropriate to leave rates unchanged for some time after a December cut.
- Participants judged reserve balances had declined to ample levels, assessed it appropriate to begin reserve management purchases of Treasury securities.
- Several participants pointed to the risk of higher inflation becoming entrenched, suggesting further rate cuts could be misinterpreted as a lack of commitment to 2% target.
- Most participants noted moving toward a more neutral policy stance would help forestall possible job market deterioration.
- Policymakers emphasized the importance of communicating that Treasury purchases are solely to ensure rate control and have no monetary policy implications.”
Market reaction to the FOMC Minutes
The US Dollar (USD) gained some upward traction with the headlines. The US Dollar Index (DXY is currently up to the 98.20 area, but remains close to its recent multi-month low of 97.91.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.30% | 0.25% | -0.01% | -0.07% | 0.15% | 0.24% | |
| EUR | -0.18% | 0.12% | 0.06% | -0.20% | -0.26% | -0.03% | 0.06% | |
| GBP | -0.30% | -0.12% | -0.04% | -0.31% | -0.37% | -0.15% | -0.08% | |
| JPY | -0.25% | -0.06% | 0.04% | -0.27% | -0.31% | -0.10% | 0.03% | |
| CAD | 0.01% | 0.20% | 0.31% | 0.27% | -0.04% | 0.20% | 0.25% | |
| AUD | 0.07% | 0.26% | 0.37% | 0.31% | 0.04% | 0.22% | 0.30% | |
| NZD | -0.15% | 0.03% | 0.15% | 0.10% | -0.20% | -0.22% | 0.07% | |
| CHF | -0.24% | -0.06% | 0.08% | -0.03% | -0.25% | -0.30% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Source: https://www.fxstreet.com/news/breaking-fomc-minutes-showed-most-officials-judged-further-rate-cuts-would-be-appropriate-202512301908
