ANALYSIS: Minutes from the most recent Federal Reserve meeting have wrong-footed the sharemarket.
| The Federal Reserve can see the US economy responding to its aggressive, if belated, response to soaring inflation, but it is searching the sweet spot for interest rates where price growth slows without choking the economy.
The Fed will almost certainly raise rates again when the Federal Open Market Committee next meets on September 20-21. The question is by how much.Another 0.75 percentage-point increase would reflect policymakers’ determination not to relax until they see definitive signs of consistently slower growth in the consumer price index . A half-point increase would suggest that concerns about economic growth are back in the driver’s seat.
“Many [Fed committee] participants remarked that... there was also a risk that the committee could tighten the stance of policy by more than necessary to restore price stability.”
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