Central Banks

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The FOMC minutes from the last meeting underscore just how confused the majority of the Fed is about what inflation is not higher. Most Fed officials also support a balance sheet move at the next FOMC meeting.

The US dollar sold off across the board with the concerns about inflation again putting into question expected rate rises by the Fed.

Inflation Minute Highlights

  • Several said inflation risk could be to the downside
  • Many saw sub 2% inflation for longer than expected
  • Official saw inflation pick up over next couple of years.
  • Many Fed officials saw weak inflation due to idiosyncratic factors
  • Some officials concerned by weak inflation, argue for patience
  • Fed split on assessment if inflation expectations well anchored
  • A fall in longer term inflation expectations would be undesirable. 

Balance Sheet Minute Highlights

  • Many expected balance sheet to only modestly tighten policy
  • Fiscal policy uncertainly damping investment
  • Rising stock prices has eased financial conditions

Source: Federal Reserve

From The Traders Community News Desk

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