FOMC minutes: Participants felt keeping the fed funds rate stable 'for a time' posed few risks at this point

Eren Sengezer FXStreet

The minutes from the Federal Reserve’s January 29-30 monetary policy meeting have been published with key highlights, via Reuters, found below.

Substantial majority of policymakers expected that at end of asset redemptions, level of reserves would likely be somewhat larger than needed for conducting rate policy.
Many policymakers suggested that some further very gradual decline in average level of reserves could be appropriate.
A few participants judged that there would be little benefit to allowing reserves to continue to fall after the end of redemptions.
A couple of participants said decreased liquidity at the end of 2018 exacerbated market movements.
A couple of participants suggested a ceiling facility to mitigate temporary unexpected pressures in reserve markets could play a useful role.
Policymakers said at end of redemptions it would appropriate to invest most if not all MBS principal payments in treasuries.
Fed participants felt keeping the fed funds rate stable 'for a time' posed few risks at this point.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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