Fed Not Even Thinking About Thinking About Cutting Rates

That's the basic message of the FOMC's minutes released today. The word "restrictive" was mentioned seven times mostly in the following context: "In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time."

The core PCED was up 3.7% y/y through September (chart). So the Fed won't cut the federal funds rate until inflation is closer to 2.0%. We optimistically think that could happen by mid-2024.