Investors next week will analyze the minutes of the US Federal Reserve meeting in March to measure the central bankers’ “appetite” for interest rates to rise by half a percentage point next month, according to Bloomberg.
Wednesday’s minutes will provide key details on the possible course of the Fed’s shrinking balance sheet. Fed Chairman Jerome Powell said the plan would be made quite clear, implying that policymakers discussed an approach and came up with it.
The last time they shrunk the balance sheet, the Fed set ceilings that allowed portfolios to be depleted to $ 50 billion a month – $ 30 billion in government bonds and $ 20 billion in mortgage-backed securities – gradually but officials said they expect to move faster this time.
In March, the Federal Open Market Committee raised its benchmark interest rate by just a quarter against the backdrop of Russia’s war in Ukraine and the fastest inflation in four decades. Since then, price pressures have only increased and labor market data show steady employment growth and wage acceleration.
The United States added nearly half a million jobs in March and the unemployment rate fell more than expected, according to government figures on Friday. These figures were followed by separate data showing a jump of 6.4% in the personal expenditure price index, which is used by the Fed for its inflation target.
Source: Capital
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