U.S. Federal Reserve Preparing For Slower Pace Of Interest Rate Hikes

The latest meeting minutes released by the U.S. Federal Reserve show that central bank officials are preparing to slow the pace of interest rate increases in America.

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” read minutes from the Federal Reserve’s November 1-2 meeting.

The latest meeting minutes have increased the likelihood that the U.S. central bank will raise rates by 50 basis-point rather than 75 basis-points at its final meeting of the year in December.

At the November gathering, Fed officials raised the trendsetting benchmark interest rate by 75-basis points for a fourth consecutive time, lifting it to a range of 3.75% to 4% to lower inflation that is running at a 40-year high south of the border.

Several Fed officials at the November meeting said that a slower pace of interest rate increases would allow the central bank to evaluate progress in meeting its goal of lowering inflation to it 2% target.

Since the November meeting, economic data in the U.S. has shown moderate growth with some signs of slowing inflation. Employers added 261,000 jobs in October and the unemployment rate in the U.S. rose slightly to 3.7%.

U.S. stocks rallied while the dollar fell following the release of the latest Fed meeting minutes. The benchmark S&P 500 index finished the trading session up 0.59%.