The minutes of the Federal Reserve's September monetary policy meeting showed that all officials support raising the target range for the federal funds rate by 25 basis points to 3.75% to 4.00%, and most officials believe that another rate hike before the end of the year is appropriate. Officials generally believe that inflation risks are biased towards an upward trend, and some officials point out that the construction of AI infrastructure may cause mid-term total demand to exceed total supply.
AI interpretation: The Federal Reserve clearly conveyed a hawkish policy stance through its minutes, emphasizing the urgency of fighting inflation over economic growth pressure. Officials' concerns about the risk of rising inflation dominate, directly blocking the policy space for a short-term shift towards easing. The sustained interest rate hike path aims to suppress aggregate demand by tightening the financial environment, ensuring that the price level returns to the target range. The market must recalibrate its expectations for peak interest rates, and a high interest rate environment will be maintained for a longer period of time to completely eradicate inflationary stickiness.
