What Could Be More Exciting Than the Fed Meeting Minutes?

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Filed under: Market Comentary

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Welcome to the first week of 2023! Happy New Year!

At 11am PST, the Fed released their meeting minutes from last month’s meeting on December 12^th. This always happens: they have the meeting, then the meeting minutes are released a few weeks later as the official record.

As Expected: No Surprises

No big surprises in these minutes, other than the fact that they don’t see any loosening or a drop in the Fed fund rate any time in 2023. They are still talking about an increase this year.

It brings up an interesting thought: it seems to me that this is the most transparent The Fed has ever been. In the past (the Greenspan days), they would just make an announcement that rates were going up, shocking everyone and the market would go crazy.

Now, they are offering transparency. It’s interesting because the markets are hanging on every word. Sometimes I wonder if The Fed is really being honest about what they are anticipating, or if they are in a funky game with the markets to try to manage expectations.

How the Markets are Affected

The Fed is always looking at data going backwards, but the markets are always looking forward. There is a weird push-and-pull there.

Even if The Fed thought they were going to stop increases or maybe decrease rates later this year… if they said that, it would send the market into a tailspin. The Fed doesn’t want to see that happen. So, it seems like a game that is being played with every word and all of the announcements.

We are all paying attention to it, making everything super relevant. We know that The Fed is going to react to current news. For example, if we were to see the market dropping and heading into a recession later this year, then it’s likely that they are going to drop rates in an attempt to mitigate the situation.

My Predictions Remain the Same

We’ll continue to keep an eye on the future. My predictions still remain the same: I think we will see a drop in interest rates and we are beyond peak inflation at this point. We’ll see what happens. Hopefully so, because we need to have options to get people back into the real estate market again.

If you need anything or have questions about a mortgage or real estate, then I’d love to help out. Contact me anytime!

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