They said that labor demand continued to outstrip available supply. “They’ve let things run out of control.”Īfter raising interest rates by a half-percentage point at the May meeting, the minutes confirmed support by most officials to continue such increases over at least their next two gatherings with their inflation battle far from won.įed officials “noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook,” the minutes said. “I think the Fed has to risk a downturn,” he said. The real question is going to come later, when we get into the fall and when they decide whether to slow down or pause,” Ethan Harris, head of global economics research at Bank of America Corp, said during an interview on Bloomberg Television. “There’s no disagreement in the committee - they’ve got to get moving here, so it’s not a big surprise. Markets continued to show traders pricing in 100 basis points of rate hikes over the next two meetings. Treasury yields fluctuated, stocks rose and the dollar pared its gain following the report. “Many participants judged that expediting the removal of policy accommodation would leave the committee well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.” “Most participants judged that 50 basis-point increases in the target range would likely be appropriate at the next couple of meetings,” minutes of the Fed’s May 3-4 meeting released Wednesday in Washington showed. Most Federal Reserve officials agreed at their gathering this month that the central bank needed to tighten in half-point steps over the next couple of meetings, continuing an aggressive set of moves that would leave policy makers with flexibility to shift gears later if needed.
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