FOMC Minutes: Fed committed to using its full range of tools to support economy

All members of the Committee agreed that the Federal Reserve remains committed to using its full range of tools to support the US economy, the minutes from the Federal Open Market Committee's (FOMC) April 28-29 monetary policy meeting showed on Wednesday.

Market reaction

The US Dollar Index largely ignored the statement and was last seen losing 0.41% on the day at 99.17.

Additional takeaways

"Members also agreed coronavirus would weigh heavily on economic activity, employment, and inflation in the near term, and posed considerable downside risks to the economic outlook over the medium term."

"Participants observed that the return of inflation to the committee’s 2% longer-run objective would likely be further delayed."

"Members said they expected to maintain the current target range until they were confident that the economy had weathered recent events and was on track to achieve the Fed's goals."

"Participants saw the accommodative stance of monetary policy as helpful in achieving the 2% inflation objective over the longer run."

"Participants agreed fiscal actions were delivering valuable aid to their districts."

"Members acknowledged that even greater fiscal support may be necessary if the economic downturn persists."

"A number of participants judged that there was a substantial likelihood of additional waves of the outbreak in the near or medium term."

"Members agreed that they would continue to monitor public health information, as well as global developments and muted inflation pressures in assessing the outlook."

"Participants noted that even after social distancing rules were lifted consumer spending was not likely to return quickly to normal levels."

"Participants reported that PPP loans had provided valuable assistance to businesses."

"Members said in deciding future policy they would assess realized and expected economic conditions relative to the Fed's maximum employment objective and its symmetric 2% inflation objective."

"Members agreed that with regards to the flow of credit policies they would closely monitor market conditions and be prepared to adjust their plans as appropriate."

"A number of members saw additional disruptions from a second wave, which could lead to a protracted period of severely reduced economic activity."
"Participants expressed concern that small businesses may not be able to endure an extended financial shock."