FOMC May meeting minutes: Patient approach appropriate to policy for some time

Author: Greg Michalowski | Category: Central Banks

FOMC May 2019 meeting minutes

  • patient approach appropriate for some time even if global conditions improved
  • many Fed officials saw inflation to as likely transitory
  • Fed discussed pros and cons of shortening bond portfolio maturity
  • generally agreed a patient approach to interest-rate policy changes was warranted
  • a few Fed policymakers that monetary policy might need to be tightened if economy evolves as expected
  • many Fed policymakers said holding shorter duration maturities could help future maturity extension programs
  • a number of Fed policymakers said a portfolio of more capacity for a maturity extension program was more desirable than a proportional portfolio with maturities similar to those of outstanding treasuries
  • many Fed policymakers said recent dip in PCE inflation likely to be transitory
  • discussed options for reaching the long-term portfolio composition, considered accelerated versus gradual approaches
  • several of Fed worried by risk of low inflation expectations
  • some say low inflation could on anchor expectations
  • inflation pressures remain muted
  • few note there still may be slack in the economy
  • some say downside risks to growth decreased
  • most say downside risks to growth remain
  • some say GDP likely to moderate after strong Q1
  • many of you weak inflation is transitory
  • inflation or 2% still most likely outcome
  • some say downside inflation risks increased
The market reaction has been somewhat muted in the Forex market.
  • USDJPY  has had a high of 110.31 and a low of 110.23. Tradesat 110.25
  • EURUSD traded to 1.1157 currently trades at 1.1163

The major stock indiceshave moved marginally lower.
  • S&P from -5.5 points to -8.5 points currently
  • NASDAQ index -21 points to -29 points currently
  • Dow industrial average -61 points to -84 points currently

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