The Fed report

AGNC’s Take On The FOMC Policy Update
NOVEMBER 8, 2024

Yesterday, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its November meeting.

FOMC Policy Updates: Key Highlights

  • As widely expected, the FOMC lowered the target range for the federal funds rate at its November meeting by 25 basis points to 4.50-4.75%, marking the second rate cut in this easing cycle.
  • Importantly, Chair Powell characterized this rate cut as another step in the monetary policy recalibration process to help maintain the strength of the economy and the labor market while enabling further progress on inflation.
  • Chair Powell reported that, on balance, the Fed’s assessment of quarter-to-date economic data has been positive and, as a result, the downside risks to the economy have modestly diminished as of the November meeting.
  • The Fed’s commentary indicated that the labor market, which has been a key area of focus at the past several meetings, is now considered to be essentially in balance and no longer a significant source of inflation.

Our Take

  • The Fed continues to emphasize risks associated with both aspects of its dual mandate – maximum employment and price stability – and its November rate cut and related comments are consistent with the cooling labor market and moderating inflation measures over the last several months.
  • Monetary policy continues to be on a path toward a neutral stance, though the pace of policy normalization and the ultimate neutral level will remain dependent upon incoming economic data.
  • While the Fed decided to continue to reduce its securities holdings, we expect the Fed to moderate the pace of balance sheet runoff in the coming months.

Important Disclosures
The thoughts, opinions, and outlook contained in the “Our Take” section are solely those of AGNC Investment Corp. (“AGNC”) management and are being shared for informational purposes only and should not be construed as investment advice. Neither the Federal Reserve nor any other third party has contributed to or been involved in AGNC’s preparation of these materials. AGNC does not endorse or adopt the views of the Federal Reserve or any third party.

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