{"id":20778,"date":"2015-11-18T16:37:51","date_gmt":"2015-11-18T22:37:51","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=20778"},"modified":"2015-11-18T16:38:38","modified_gmt":"2015-11-18T22:38:38","slug":"the-most-important-thing-you-need-to-know-about-the-feds-october-meeting-minutes","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/the-most-important-thing-you-need-to-know-about-the-feds-october-meeting-minutes\/","title":{"rendered":"The most important thing you need to know about the Fed’s October meeting minutes"},"content":{"rendered":"

By Arionne Nettles<\/p>\n

The minutes of the Federal Reserve\u2019s policy meeting last month made one thing very clear: that the Fed is poised to raise interest rates in December.<\/p>\n

Minutes released Wednesday from its October meeting<\/a> showed that a majority of Fed officials were nearly ready to vote for an increase in the federal funds rate, the rate banks charge one another for overnight funds.<\/p>\n

<\/p>\n

A hike in the rate has been highly anticipated, as it\u2019s been held near zero since 2009\u2019s financial crisis.<\/p>\n

[soundcloud url=”https:\/\/api.soundcloud.com\/tracks\/233684359″ params=”color=ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false” width=”100%” height=”166″ iframe=”true” \/]<\/p>\n

\u201cMost participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting,\u201d according to the meeting minutes.<\/p>\n

Diane Swonk, chief economist at Mesirow Financial, said that an interest hike is likely happening.<\/p>\n

\u201cData released since the meeting pretty much ensures that the Fed will attain liftoff in December,\u201d Swonk said. \u201cSigns that wages and inflation may be firming push the bulk of the committee past the starting line for liftoff.<\/p>\n

The minutes showed three reasons why the Fed might be ready now.<\/p>\n

The job market is stronger.<\/strong><\/h2>\n

Fed officials discussed the need to see a resumption in strong job growth following a slowdown in August and September. That happened a few weeks later, when the October jobs report showed the strongest job growth in almost a year, a 2.5 percent increase in wages from a year ago, and a 5 percent unemployment rate \u2014 the lowest since 2008.<\/p>\n

Inflation is getting closer to its target.<\/strong><\/h2>\n

The inflation goal for a healthy economy is 2 percent, according to the Fed. It uses the personal consumption expenditures index<\/a>, and this measure rose 1.3 percent from a year ago, excluding volatile food and energy.<\/p>\n

A small increase now will prevent a larger increase later.<\/strong><\/h2>\n

Fed officials emphasized that they want the federal funds increases to be gradual. In order to slowly raise the federal funds rate in small increments, the first rise in rates needs to be soon.<\/p>\n

\u201c\u2026Beginning the normalization process relatively soon would make it more likely that the policy trajectory after liftoff could be shallow,\u201d the meeting minutes said.<\/p>\n

The Federal Open Market Committee, the Fed\u2019s policy-making arm, meets eight times annually to discuss the nation\u2019s monetary policy. Its next meeting is scheduled for Dec. 15-16.<\/p>\n

Photo at top: After staying at nearly zero since 2009, the Federal Reserve’s long-awaited interest rate hike is likely to occur in December. (Arionne Nettles\/MEDILL)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Arionne Nettles The minutes of the Federal Reserve\u2019s policy meeting last month made one thing very clear: that the Fed is poised to raise interest rates in December. Minutes released Wednesday from its October meeting showed that a majority of Fed officials were nearly ready to vote for an increase in the federal funds […]<\/p>\n","protected":false},"author":167,"featured_media":20789,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,509],"tags":[192],"class_list":["post-20778","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-fall-2015","tag-promo"],"yoast_head":"\nThe most important thing you need to know about the Fed's October meeting minutes - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/the-most-important-thing-you-need-to-know-about-the-feds-october-meeting-minutes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The most important thing you need to know about the Fed's October meeting minutes - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Arionne Nettles The minutes of the Federal Reserve\u2019s policy meeting last month made one thing very clear: that the Fed is poised to raise interest rates in December. 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