Highlights of the Jan 28-29, 2020 FOMC meeting minutes:
- Conditions expected in Q2 for T-bill tapering
- Saw risks to economic activity as 'somewhat more favorable' than at previous meeting
- Expected economic growth to continue at a 'moderate pace'
- Cited easing of trade tensions, receding risks from Brexit and stabilizing global growth as reducing downside risks
- Generally expected trade uncertainty to remain somewhat elevated
- Agreed threat from virus 'warranted close watching'
- Once reserves reach ample levels, regular open market operations will be required over time to accommodate trend growth in Fed's liabilities and maintain ample reserves
There has been little market reaction to the headlines.
We have heard all these messages before from Powell and other Fed members. It's a rare moment when the message is very much united and consistent. The market continues to doubt there will be a long period of watching with a 78% chance of a cut priced in at the July meeting.
