Highlights of the FOMC minutes 21 May 2014
- Participants said labour market tight in their districts and businesses seeing shortage of workers
- Low wage growth cited as evidence of labour market slack
- Some members sceptical that short term joblessness more important that long term unemployment
- Most saw inflation at 2.0% within the next few years
- Saw no inflation risk in fueling job growth
- Few said Fed should be clearer about its approach to eventual rate hikes
- Some said Fed should specify plans for reinvesting its asset holdings and shrinking the balance sheet
- discussed monetary policy normalisation as part of prudent planning
- Judges Fed should consider range of options for normalising policy but made no decisions
- Favoured more testing of policy tools and plan a further review at upcoming meetings
Full details of the minutes here
On a quick take of the minutes, the Fed are still in taper city and their eye is still firmly on the end of QE and getting out of it. The comment on “fueling job growth” is potentially interesting as it could suggest moves to spur wage growth.
