Fed Minutes:Will take longer than anticipated to gain greater confidence in inflation fall

  • Participants at Fed’s April 30-May 1 meeting assessed it would take longer than previously anticipated to gain greater confidence in inflation moving sustainably to 2% – minutes
  • Various participants mentioned willingness to tighten policy further should risks to outlook materialize and make such action appropriate
  • Many participants commented on their uncertainty about the degree of policy restrictiveness
  • Participants remarked future policy path would depend on incoming data, the evolving outlook, and the balance of risks
  • Almost all participants supported decision to begin to slow pace of decline of central bank’s securities holdings; a few could have supported continuation of current pace
  • A couple of participants said it would be useful to begin discussions of appropriate longer-run maturity composition of Fed’s portfolio
  • Participants noted recent data had not increased confidence in progress toward 2% inflation goal and suggested disinflation process would take longer than previously thought
  • Fed staff’s economic projection was similar to March outlook, but noted that deteriorating household financial positions, especially for lower-income households, might prove to be a bigger drag on activity than anticipated

This article was written by Greg Michalowski at www.forexlive.com. Source