FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon
|The minutes from the May (2nd & 3rd) Federal Reserve’s monetary policy meeting have been published, highlighting that nearly all Fed policymakers expressed a favorable view of the staff proposal as a way to reduce central bank holdings in a gradual and predictable manner.
Key headlines (via Reuters):
- U.S. Federal Reserve policymakers said "prudent" to wait for further evidence that recent weak economic data was transitory before raising interest rates again
- Fed officials said they expected weakness would pass and that it would "soon be appropriate" to raise rates if those expectations were met
- Fed staff presented plan to set gradually increasing limits on balance sheet reinvestment that would start low and be raised every three months over a set period of time until fully phased in
- Nearly all Fed policymakers expressed a favorable view of the staff proposal as a way to reduce central bank holdings in a gradual and predictable manner
- Fed policymakers agreed that details of balance sheet plan should be announced soon, with start of reductions appropriate this year
- Most Fed officials viewed recent soft inflation as "transitory," though a few raised concerns that progress toward the central bank's 2 percent target had slowed
- Many Fed officials said they continued to see possible upside risks from an expansionary U.S. Fiscal policy, but noted uncertainty around outcome of Trump administration economic proposals
- In general, Fed officials said their assessment of the economy had changed little since the March policy meeting, with the labor market continuing to improve and risks from the global economy receding
- Fed officials said they expected a rebound in consumer spending in coming months in light of solid economic fundamentals
- Fed officials said they saw near-term risks to the economic outlook as roughly balanced, though several noted global geopolitical uncertainty and possible emerging market strains as U.S. Rates rise
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.