Fed Meeting November 2023, Did the Federal Reserve Raise Interest Rates?

Fed Meeting November 2023

The Federal Reserve decided to keep its key federal funds rate unchanged at a target range of 5.25% to 5.5% during the November 2023 Federal Open Market Committee (FOMC) meeting. This decision marked the second consecutive meeting where the Fed opted to maintain the rate following a series of 11 rate hikes, including four in 2023.

The unanimous decision to hold rates steady came amid a backdrop of a growing economy, a strong labor market, and persistently high inflation levels that exceed the central bank's target. The decision was widely expected by market participants and contributed to a rally in the stock market.

Economic Assessment and Outlook

The FOMC meeting also featured an upgrade to the committee's general assessment of the economy. The post-meeting statement acknowledged that economic activity expanded at a strong pace during the third quarter of 2023. This was an improvement compared to the September statement, which characterized the economy's expansion as merely "solid." The statement noted that employment gains had moderated since earlier in the year but remained strong.

Gross domestic product (GDP) had expanded at a robust annualized rate of 4.9% in the third quarter, surpassing elevated expectations. Nonfarm payrolls growth reached 336,000 in September, exceeding Wall Street forecasts. Despite the rate hikes, the statement emphasized that both financial and credit conditions had tightened. The FOMC is still determining the extent of additional policy tightening required to achieve its goals.

Rising Bond Yields and Policy Stance

The Fed's decision to hold rates unchanged coincided with surging bond yields, which had reached levels not seen since 2007, the earliest days of the financial crisis. Treasury yields had risen due to factors such as stronger-than-expected economic growth, stubbornly high inflation, a hawkish Fed, and a high "term premium" as bond investors demanded higher yields to compensate for the risk of holding longer-duration fixed income.

Concerns about Treasury issuance have also played a role in this surge as the government aims to finance its significant debt load. Chairman Jerome Powell suggested that the economy may need to slow down further to combat inflation, and most forecasters anticipate an economic slowdown ahead.

However, the expectation in the wake of the FOMC's statement is that the Fed will likely keep its policy unchanged into the next year, as there is a balance of risks for both further rate hikes due to higher inflation expectations and stronger economic activity, as well as a potential economic slowdown caused by the growing impact of higher interest rates, which might accelerate the timeline for transitioning to rate cuts.

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Did the Federal Reserve Raise Interest Rates Today?

No, the Federal Reserve did not raise interest rates today. During the recent Federal Open Market Committee policy meeting, the central bank chose to leave interest rates unchanged for the second consecutive meeting in its current policy-tightening cycle. The decision to keep rates steady was unanimous and widely anticipated, maintaining the target for the federal-funds rate at a range of 5.25% to 5.50%.

The central bank's statement did not rule out the possibility of future rate hikes, and Federal Reserve Chair Jerome Powell emphasized that officials were not yet satisfied with progress on inflation, suggesting that monetary policy might not be restrictive enough. Policymakers also expressed concern about rising bond yields contributing to tighter financial conditions.

What Did the Fed Announce Today About Interest Rates?

The Federal Reserve announced today that it has decided to keep the key overnight interest rates unchanged at a range of 5.25% to 5.50%. This marks the second consecutive meeting where the Jerome Powell-led Federal Open Market Committee (FOMC) has chosen to hold interest rates steady at a 22-year high.

Despite the resilience of the US economy, which continues to show strong job gains, and persistently high inflation levels, the Fed's statement emphasized that they are still considering the extent of additional policy firming over time. The US GDP expanded at an annualized rate of 4.9% in the third quarter, according to the US Bureau of Economic Analysis (BEA) first estimate.

Did the Fed Pause Rate Hikes?

Yes, the Federal Reserve decided to pause rate hikes, leaving interest rates unchanged at the conclusion of the Federal Open Market Committee policy meeting. This marks the second consecutive meeting where the central bank has chosen not to raise interest rates in its current policy-tightening cycle.