Minutes of the FOMC's April 27-28 meeting revealed on Wednesday that participants generally noted that the economy remained far from the Committee's maximum-employment and price-stability goals.

Market reaction

Although the initial reaction of the greenback was largely muted, the US Dollar Index gained traction and was last seen rising 0.4% on the day at 90.13.

Additional takeaways as summarized by Reuters

"Participants judged current stance of policy, guidance remained appropriate."

"Many participants noted consumer spending would keep being supported by fiscal stimulus, vaccine progress, pent up demand, high level of savings."

"Many participants discussed reports of shortages of materials and labor as well as supply chain bottlenecks as likely restraints to the pace of recovery in manufacturing and other sectors."

"A couple of Fed policymakers raised risks of inflation building to 'unwelcome' levels before sufficiently evident to induce policy reaction."

"Many participants noted district contacts seeing pickup in activity in the leisure, travel, and hospitality sectors."

"Various policymakers noted it would likely be some time before substantial progress bar reached."

"Couple of participants reported improved conditions in the agricultural sector, with farmers’ income supported by higher crop prices and federal aid payments."

"Some participants noted that the labor market recovery continued to be uneven across demographic and income groups and across sectors."

"Many participants remarked business contacts having trouble hiring workers, likely reflecting early retirements, health concerns, childcare responsibilities, and expanded unemployment insurance benefits."

"A number of Fed policymakers thought if the economy continued rapid progress, appropriate 'at some point' in upcoming meetings to begin discussing taper."

"Many participants said labor market restraints were depressing labor force participation rate, relative to its pre-pandemic level."

"Some participants noted contacts saying step-up in demand for labor had started to put some upward pressure on wages."

"A few Fed policymakers noted 'moderate' level of vulnerabilities from business, household debt."

"A couple of participants said some businesses in industries severely affected by pandemic were downsizing or some were focused on cutting costs or increasing productivity, particularly through automation."

"Aa couple Fed policymakers thought forbearance programs could be masking vulnerabilities."

"Participants anticipated inflation would move above 2% in near term as low readings from early in pandemic fall out of the calculation."

"A number of participants suggested that if the economy continued to make rapid progress toward the Committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases."

"Staff briefed policymakers on considerations that could be relevant for judgments regarding whether repo market arrangements should become permanent standing facilities."

"Several participants note risk appetite in capital markets was elevated."

"Participants generally expected measured inflation to ease after transitory effects fade."

"Staff also noted a standing repo facility could create incentives for nonbank firms with access to the facility to take on more liquidity risk than would otherwise be the case."

"A couple noted that a drop in asset prices if risk appetite falls could have adverse implications for the real economy."

"A number of participants noted somewhat elevated valuation pressures in the housing market."

"A number of participants said supply chain bottlenecks and input shortages may not be resolved quickly and these factors could put upward pressure on prices beyond this year."

"Looking further ahead, participants expected inflation consistent with achieving the committee’s objectives over time."

"Policymakers assessed risks to outlook no longer as elevated as in previous months."

"Some participants mentioned upside risks around inflation outlook if temporary factors turn out to be more persistent."

"Some participants said downside risks from pandemic continued, noted potential for an uneven recovery in light of new virus strains and potential hesitancy regarding vaccination."

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures