Latest / Markets with Megan: A Quick Financial Markets Update / Fed Minutes: Rate Hike Is Back on the Table | S3 E147 | 05-20-26

Transcript

Fed Minutes: Rate Hike Is Back on the Table | S3 E147 | 05-20-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Well, the Fed continues to reiterate what we heard in their meeting on April 29th when they discussed the concern that they have around inflation.
• 0:09
  Megan Horneman: It's Wednesday, May 20th, and this is Markets with Megan.
• 0:11
  Megan Horneman: If you like this podcast, you can subscribe, hit the alarm bell, share it with your friends, family, colleagues, anybody who may be interested in that economic data that we see on a regular basis and what does it mean for your investments?
• 0:25
  Megan Horneman: Well, this today we got the actual meeting minutes from the Fed's April meeting.
• 0:30
  Megan Horneman: Now, after the meeting that they have when they have their regularly scheduled meetings, they typically release a short statement and then a press conference.
• 0:38
  Megan Horneman: Now, shortly thereafter, a few weeks later, we get the full transcript of the meeting.
• 0:42
  Megan Horneman: And that gives us a little bit more insight into what the committee members were actually thinking.
• 0:48
  Megan Horneman: And we've really, what we saw is that this still remains very much an inflation story.
• 0:53
  Megan Horneman: The majority of the officials said that they may need to raise interest rates if inflation continues to run above 2%, which it can has continued to run above 2% and is actually climbing further.
• 1:07
  Megan Horneman: The wording um they upgrade they upgraded for the on inflation was they said it was somewhat elevated before.
• 1:14
  Megan Horneman: And in this meeting minutes, they said it was actually elevated.
• 1:17
  Megan Horneman: So I know that may seem silly that that investors focus focus on one word, but yes, when they make that type of a switch to uh their their comments, that means that they are warning you that they're starting to get worried about inflation.
• 1:33
  Megan Horneman: Now, this committee had um many dissenters on it, which is rare.
• 1:38
  Megan Horneman: It was a vote of eight to four.
• 1:40
  Megan Horneman: There were four dissenters.
• 1:41
  Megan Horneman: That was the most since October of 1992.
• 1:45
  Megan Horneman: Three members wanted to change the language to suggest to investors that the next move may be a rate hike.
• 1:53
  Megan Horneman: And there was one that actually still wanted a rate cut.
• 1:57
  Megan Horneman: Uh, the labor market they mentioned actually, they kind of upgraded that a bit.
• 2:01
  Megan Horneman: They said it's stabilizing, but but it still is a little bit fragile, but it is stabilizing.
• 2:06
  Megan Horneman: Now, the market, because of what we've seen with inflation, what we've seen with um bond yields, the market's pricing in now one interest rate hike before the end of this year.
• 2:16
  Megan Horneman: And this is a very different picture than what we saw when the Fed came in in their first meeting this year, where they were still looking for rate cuts.
• 2:23
  Megan Horneman: Now, we'll get their further dot plots or the their actual economic projections at the next meeting, at their June meeting.
• 2:31
  Megan Horneman: And it'll also be the first meeting where Kevin Warsh come takes over as Federal Reserve Chairman.
• 2:36
  Megan Horneman: That's all we have today.
• 2:37
  Megan Horneman: If you'd like a history of our podcast, you can go to marketswithmegan.fm.
• 2:40
  Megan Horneman: Thank you.