Daily Alert – Wednesday 22nd November 2023: No surprises from the Fed

Mark NugentDaily Alert, Nov 2023

Daily Alert – Wednesday 22nd November 2023: No surprises from the Fed

Good afternoon.

Last night’s FOMC Meeting Minutes were neither hawkish nor dovish. Concern was expressed about stubborn inflation (again) and the fact it may turn around and start rising (again) and they’ll do what they need to do to get to the 2% target (again).

No mention was made about reducing rates. Some people seem surprised by this but there is no way the Fed is going to even allude to reducing rates at this point. If they were to do so now, the USD would drop, equities would rise, spending would rise as people felt they were out of the woods and there would be upwards pressure on inflation, the exact opposite of what the Fed wants.

Again, the strength of the US economy was shown by Unemployment Claims missing expectation to the downside by a decent margin.

The US and Japan are now on holiday.

Tomorrow, we have tonnes of PMI data from Germany, the Eurozone and the UK. These data will give insight into how much of a depressing effect all the rate hiking has had in these jurisdictions.

We’ll have a look at that tomorrow.

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