The Federal Reserve (Fed) is willing to continue raising interest rates in the upcoming meetings, as well as take further steps in reducing the balance sheet to contain the inflationary pressures that they still perceive in the US economy, especially on the front. labor. Despite the reduction in the pace of rate hikes at the meeting on February 1, the central bank places its target above 5%, as raised by its president Jerome Powell, in his recent appearances.
However, the minutes of the meeting that were released this Wednesday contrast sharply with Powell’s press conference 20 days ago, when he mentioned the term ‘disinflation’ up to 13 times and expressed his satisfaction with the evolution of losificá, qualifying it as as “rewarding” because it showed the results of his policy. The meeting record leaves no trace of this term and presents a somewhat tougher debate.
“Meeting participants agreed that inflation was unacceptably high. Several members commented that the costs of high inflation are particularly high for low-income households.” The document recalls that inflation data for the past three months showed “a welcome reduction in the monthly pace of price increases,” but the central bank governors stressed that “much more evidence of such progress would be needed to be sure.” that inflation was sustained on a downward path.
The report on the content and discussion of the Fed meeting focuses the next steps of monetary policy on the incoming macroeconomic data and its implications for the outlook for economic activity and inflation. “Several participants noted that financial conditions have eased in recent months, which some say may require a tighter monetary policy stance,” he warned.
In that sense, some governors defended that they were in favor of a 50 basis point increase, noting that “a larger increase would more quickly move the target range closer to the levels that they believed would achieve a sufficiently restrictive stance, taking into account the risks to achieve price stability in a timely manner”. Loreta Mester or James Bullard have spoken in public during the last week pointing out that missed opportunity.