The post All eyes on Fed minutes as investors expect no rate cuts in December appeared on BitcoinEthereumNews.com.

The Federal Reserve’s November meeting minutes, scheduled for release today at 2 pm in Washington, have our markets on edge. Traders are eager for clarity on whether the central bank plans to hit the brakes on its recent streak of interest rate cuts. As inflation crawls toward the 2% target and productivity defies years of stagnation, Fed policymakers are signaling that rate reductions could slow, but they’re not ruling anything out. Chair Jerome Powell, Dallas Fed President Lorie Logan, and Governor Michelle Bowman have all hinted at caution, suggesting that the Fed is in no rush to slash rates further. But with one more meeting left this year, scheduled for December 17-18, nothing is set in stone. As of now, bets for a quarter-point cut stand at 56%, a steep decline from the 80% probability projected before the Fed’s last move in November. If the Fed does cut, it would bring rates to a range of 4.25% to 4.5%, one of the fastest easing streaks outside a financial crisis since 2001. The neutral rate dilemma The Fed has long relied on the concept of a “neutral rate,” the level at which borrowing costs neither boost nor drag down the economy. But defining this rate has become increasingly messy. In theory, it serves as a compass for monetary policy, but the robust economic performance of the past two years has challenged old assumptions. In September, the Fed’s median estimate for the neutral rate climbed to 2.9%, up from 2.5% just nine months earlier. Still, there’s no consensus. Recent forecasts show Fed officials are deeply divided: 12 policymakers place the neutral rate between 2.375% and 3%, while seven see it as high as 3.25% to 3.75%.  A December cut would push the federal funds rate closer to an investor-favored neutral proxy, currently…

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Filed under: News - @ November 26, 2024 2:27 pm