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At 11AM PST on November 1st, the Federal Reserve announced that their interest rate would not be increased for the 2nd straight month. Treasury Notes moved lower during the follow-up address by Chairman Jerome Powell. The 2-Year dipped below 5% for the first time since October 10th. A summary of comments by J. Powell follows:

  • Inflation has moderated
  • Getting inflation to 2% has a long way to go
  • Labor supply & demand continue to come into better balance
  • The full effects of tightening have yet to be felt
  • The economy has expanded well above expectations
  • The labor market remains tight
  • Could warrant further tightening
  • A few months of good inflation data is only the beginning
  • We still have a long way to go to get to their 2% objective
  • We are not confident that the policy is sufficiently restrictive
  • Tight policy is putting downward pressure on inflation
  • Inflation is painful for people without financial resources
  • They are committed to reaching their 2% inflation objective

Are more rate hikes in the cards for 2023 and beyond? And when might the Fed actually reduce interest rates? Some are estimating mid-2024, but most feel it will be at least until the end of 2024 prior to any reductions.

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