Stock Market Update

[BRIEFING.COM] The recently released minutes for the Nov. 6-7 FOMC meeting noted that, many participants observed that uncertainties concerning the level of the neutral rate of interest complicated the assessment of the degree of restrictiveness of monetary policy and, in their view, made it appropriate to reduce policy restraint gradually.

As it stands currently, the S&P 500 (+0.28%) is now in the lead among the major averages, holding up the best amid a modest post-minutes fade.

Getting back to the minutes, in their discussion of inflation developments, participants continued to observe that inflation had eased substantially from its peak, although core inflation remained somewhat elevated.

Further, in discussing the positioning of monetary policy in response to potential changes in the balance of risks, some participants noted that the Committee could pause its easing of the policy rate and hold it at a restrictive level if inflation remained elevated, and some remarked that policy easing could be accelerated if the labor market turned down or economic activity faltered. Many participants observed that uncertainties concerning the level of the neutral rate of interest complicated the assessment of the degree of restrictiveness of monetary policy and, in their view, made it appropriate to reduce policy restraint gradually.

What's more, relative to September, the real GDP growth projection for 2024 as a whole was higher, reflecting stronger-than-expected spending and labor market indicators.

Survey results indicated that respondents expected balance sheet runoff to continue alongside rate cuts for several more months; the surveys therefore suggested that the Committee's two policy tools—the policy rate and the balance sheet—were not seen as working at cross-purposes.

Yields held firm following the minutes, the yield on the benchmark 10-yr treasury note is up four basis points at 4.320%.