Fed minutes not so hawkish

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Goldman with the note. No 50bps hike there.

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BOTTOM LINE: The January FOMC minutes indicated that participants judged that it would “soon be appropriate” to raise the federal funds rate, but “some” participants noted that “financial conditions might tighten unduly” in response to rapid monetary policy tightening, suggesting a 50bp hike in March is less likely. Regarding balance sheet plans, participants generally noted that “a faster pace” and “significant” reduction would be appropriate, but specific details were limited, suggesting that the Committee intends to complete their discussion at upcoming meetings before indicating their intentions. Participants cited “inflationary wage-price dynamics” as one upside risk to inflation, though they continued to expect inflation to moderate over the course of the year.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.