Fed Wrap – Fed Cuts 25bp and Remains Pragmatic

Ryan Weldon, from IFM’s Debt Investments Team in New York, features in our Fed Wrap Market Update videos discussing central bank themes in debt markets, with a particular focus on the US Federal Reserve (Fed).

In this edition, Ryan discusses the outcomes of the November Fed meeting, the key points from the press conference and what to watch ahead of the next meeting.

At the November meeting, the Federal Reserve cut rates by 25bp, lowering the upper band of their policy rate to 4.75% with no dissenting votes.  Changes to the statement were more focused on balancing the risks to their dual mandate of achieving maximum employment and an inflation rate of 2% over the longer run.  They did remove the word “further” in reference to the progress they have made on their inflation mandate and noted that inflation remains somewhat elevated.  Overall, the Fed remain attentive to risks on both of its goals but are aware that inflation still poses the biggest challenge.