FOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soon

Felipe Erazo FXStreet

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

Author

Felipe Erazo

FXStreet

Born in Colombia, Felipe Erazo is the American Session Manager at FXStreet. He has been studying journalism with a degree in social communication at the Universidad de Chile.

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