- FOMC
The minutes of the FOMC meeting in October reinforced the view that the Fed may finally hike interest rates as soon as next month, given job growth and inflation trends remain resilient and continue to improve. Yet, Fed officials remain divided, as some policy makers doubted that economic data available by the December meeting would warrant raising the target range for the federal funds rate. Markets seemed to be getting used to the idea of higher rates in the near future, as the US central bank has now warned about rate hikes so many times. While stocks usually tumble amid increase in rates, equities rose Wednesday, a sign that a rate hike is already prices into markets. Meanwhile, US housing starts dropped to the lowest level in seven months in October, while a surge in building permits signalled the housing market remained on firm footing. Groundbreaking plunged 11% to a seasonally adjusted annual pace of 1.06 million units, according to the Commerce Department. Moreover, September's figure was revised down to a 1.19 million unit pace, down from 1.21 million units. Nevertheless, October marked the seventh consecutive month that starts remained above 1 million units, the longest such streak since 2007. Housing has contributed to economic output growth in each of the last six quarters and is absorbing some of the slack from a sluggish manufacturing sector. Meanwhile, building permits soared 4.1% to a 1.15 million unit rate in October.
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