[Federal Reserve Meeting Minutes Released Tonight, September Rate Hike May Be Just the Start of a New Round of Tightening] BlockBeats News, October 7 — The Federal Reserve's September meeting minutes will be released at 2 a.m. Beijing time on Thursday. The market's focus may not only be on the rationale behind the 25 basis point rate hike in September but also on how officials assess the restrictiveness of the current financial environment and whether further rate hikes will be necessary in the future. The Chicago Fed National Financial Conditions Index shows that U.S. financial conditions have been steadily easing since the fall of 2022 and remain on the more accommodative side of historical ranges. Additionally, the option-adjusted spread of the ICE BofA U.S. High Yield Bond Index is also at historically low levels. Michael Kramer, founder of Mott Capital Management, believes that if the Federal Reserve prioritizes these indicators, the current financial environment may still fall short of being defined as a clearly restrictive policy. Meanwhile, U.S. overall PCE rose 3.4% year-over-year in August, while core PCE rose 3.0% year-over-year. The current effective federal funds rate is approximately 3.9%, corresponding to a real interest rate of only about 50 basis points (based on overall PCE) or 90 basis points (based on core PCE), significantly lower than the real interest rate level during Kevin Warsh's mid-term tenure in 2006. Kramer stated that if the meeting minutes reveal discussions among officials regarding financial conditions, real interest rates, and the pace of inflation decline, it could help the market determine whether the September rate hike was a one-time adjustment or the beginning of a new tightening cycle. [Original Link]