FOMC meeting minutes for May 2022:
inflation risks are skewed to the upside
All participant voted for 50 basis point hike
Several participants commented on the challenges that monetary policy faced in restoring price stability while also maintaining strong labor market conditions
China lockdowns and Ukraine increased risks
restrictive stance on monetary policy may well become appropriate
should assess the risk the economy later this year after the rate hikes
Fed should move expeditiously to neutral
some felt inflation expectations could become unanchored
50 basis point increase is likely appropriate to the next couple of meetings
a number supported selling mortgage-backed securities
several thought the potential for unanticipated effects in the financial markets from the run off of the balance sheet
concerned about the risks from higher income commodity prices
many expect tight labor market and wage pressures to continue for some time
China and the Ukraine war posed heightened risks for both United States and and economies around the world
new inflation pressures received from China as well as the Ukraine war, and were likely to weigh on economic activity
Members judged that the implications of the war for the U.S. economy were highly uncertain
higher wages and input prices were being passed on to consumers
inflation risk being skewed to the upside
Many participants judged that expediting the removal of policy accommodation would leave the Committee well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.
COVID-related lockdowns in China were likely to exacerbate supply chain disruptions
although overall economic activity had edged down in the first quarter, household spending and business fixed investment had remained strong
Job gains had been robust in recent months, and the unemployment rate had declined substantially.
inflation remained elevated, reflecting continued supply and demand imbalances, higher energy prices, and broader price pressures.