central bank officials United StatesThe Federal Reserve agreed that, with inflation increasing its impact on the economy and a strong labor market, it is time to tighten monetary policy, but also that decisions depend on a data analysis carried out on a meeting by meeting basis, according to the minutes of the 25th and January 26th.
Participants agreed that the interest rate The target would likely have to rise at a “faster pace” than when the Fed last raised rates in 2015, according to the minutes released Wednesday.
But “even so, participants emphasized that the proper path for monetary policy would depend on the unfolding of economic and financial factors and their implications for the outlook and the risks surrounding the outlook,” the minutes said.
Participants “will update their assessments of the appropriate setting for the monetary policy stance at each meeting,” as officials consider both interest rate hikes and plans to reduce Fed asset holdings, according to the minutes.
The document provides a more detailed mosaic of last month’s meeting, at which policymakers agreed that it would “soon be appropriate” to raise the Fed’s one-day interest rate from its current level of between 0% and 0.25%. .
They also discussed plans to reduce the stock of nearly $9 trillion of bonds held by the central bank.
Investors currently expect the Fed to start raising interest rates in March with an initial 50 percentage point hike, and to continue raising rates throughout the year.
Economic indicators since the beginning of this year have reinforced the Fed’s readiness to act. At January retail sales came in strong, and US employers created 467,000 new jobs last month, far more than expected. The data of inflation The most recent ones showed no sign of retreating from the highest level in 40 years.
Monetary policymakers last month also discussed plans to reduce the Fed’s holdings of US bonds. United States Treasury and mortgage-backed securities and issued a broad set of principles to guide reductions.
They must now define the specifics of how much reduction will be allowed each month and when that should start.
Source: CNN Brasil
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