April 6, 2017
Two big uncertainties were central topics of discussion at the most recent Federal Reserve meetings: rising inflation and President Trump’s economic stimulus plans. The minutes from those meetings released this week, revealed near-unanimous support for the quarter-point rise in the key policy rate.
But beyond that, little agreement was found.
Future rate hikes will continue to be gradual, though policymakers say they’re prepared to respond quickly.
And there were “substantial uncertainties” about the shape of the White House’s economic stimulus program. Roughly half of the Fed officials’ economic forecasts didn’t include any assumptions about what will emerge from Congress.
The Fed is also pondering what to do about a $4.5-trillion balance sheet, which quadrupled when the central bank completed a series of bond purchases to help lower long-term interest rates and boost the economy. The committee’s reinvestment policy will likely be changed later this year, if all continues well.
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