America News Agency

The minutes indicate that nominal Treasury yields fluctuated between meetings and were slightly higher compared to early November. Yields have risen significantly since mid-September, primarily driven by increases in real yields.

Liquidity in Treasury markets deteriorated slightly following the U.S. elections but remained within the ranges observed over the past three years. The minutes state:

“Short-term inflation compensation measures were slightly higher during the inter-meeting period, while long-term measures changed little. The director noted a few concerning signs of persistent inflationary pressures reflected in market prices. Stock prices largely retained the gains made before and after the U.S. elections.”

The minutes indicate that market expectations for the federal funds rate trajectory changed little over the inter-meeting period:

“Markets had almost fully priced in a 25-basis-point cut in the federal funds rate target range for this meeting.”

The director also discussed balance sheet policy expectations. The average estimate for the end of balance sheet reduction shifted to June 2025, reflecting revised forecasts among participants.

Regarding international developments, the minutes note that market participants expect central banks in most developed foreign economies to continue lowering interest rates in 2025:

“Unlike the U.S., in most developed foreign economies, market expectations for the end of 2025 indicate further declines in interest rates.”

The committee’s next meeting is scheduled for January 28-29.