Federal Reserve:Meetings/2023 December 13

Summary:

FOMC voted unanimously to maintain the target range for the fed funds rate at 5.25%-5.50%, as was widely expected by the market.
The FOMC statement said inflation has eased over the past year but remains elevated, job gains have moderated, unemployment rate has remained low and economic activity has slowed from its strong pace in the third quarter.
The statement noted that the committee is committed to bringing inflation down to their 2% target and that they will continue to rely on incoming data in determining if “any” addittional policy firming will be needed.
FOMC’s “dot plot” models at least three rate cuts (of 25 basis points) in 2024, less than four rate cuts that was expected by the market but a sharper pace than projected in September.
For 2025 and 2026, the the dot plot" indicates four and three rate cuts respectively though individual expectations in these two years differed considerably.

No additional hikes is likely, but they are not removing off the table completely the possibility if its becomes appropriate
Some fed member has said that If inflation continues to come down, rate cuts will be needed, if not the real rates could become more restrictive. So, cuts are a signal to keep real rates equal.
Rate cuts will be a topic in their meetings going forward. This is new, as last meeting they said rate cuts were not even discussed.
There is a real possibility that there will be a recession in 2024, but the soft landing is also still possible if the current trends continue. So, basically, no one knows.
Financial conditions will come into alignment with their goals, but in the meantime, there will be a lot of volatility.
He welcomes the progress in inflation, but he needs to see continued progress.
A surprise in growth in 2024 again, could mean inflation takes longer to get to target, and then rates higher for longer, or even more hikes.
No thinking about altering the pace of QT.