Liz Kiesche,
uschools
- Some Federal Reserve officials have warned that recent increases in inflation “have been relatively broad-based and therefore should not be discounted as mere statistical aberrations,” according to the minutes of the latest FOMC meeting on March 19-20.
- This indicates that they were there at least some policymakers who were not of the opinion that the January and February inflation data were a “bump” on the path to the Fed’s 2% inflation target.
- Housing inflation remained a major concern. “Participants discussed the still high rate of housing services inflation and commented on the uncertainty as to when and to what extent the lower values of rent growth on new leases will pass through to this inflation category,” it reads in the minutes.
- Overall, officials noted that uncertainty about the persistence of high inflation had not increased their confidence that inflation was moving sustainably toward 2%.
- In their discussion of the Fed’s quantitative tightening, officials began discussing the process of slowing the balance sheet outflow, which the Fed indicated would be “fairly soon.” “Participants were generally in favor of reducing the monthly pace of runoff by approximately half compared to the recent overall pace,” the minutes read.
- As Chairman Jerome Powell communicated and as indicated in the FOMC’s summary of economic projections, “nearly all participants felt it would be appropriate to shift policy toward a less restrictive stance at some point this year if the economy developed substantially as expected”.
- Development… check back for updates.