FOMC Minutes: Almost all participants at Fed's March 19-20 meeting judged it would be appropriate to pivot to less restrictive policy stance at some point this year

INFLATION:

• Participants noted disinflation process was continuing on a path generally expected to be somewhat uneven.


• Participants generally judged risks to achieving employment and inflation goals were moving into better balance.


• Participants generally noted uncertainty about persistence of high inflation.


• Participants generally noted recent data had not "increased confidence" that inflation was moving sustainably down to 2%.

ECONOMIC OUTLOOK:

• Some participants pointed to geopolitical risks that might cause more severe supply bottlenecks.


• Some participants noted concern that financial conditions might not be as restrictive as desired, which could put upward pressure on inflation.


• Most participants noted that, during the past year, labour supply had been boosted by increased labour force participation as well as by immigration.


• Participants further commented that recent estimates of greater immigration in the past few years and an overall increase in labour supply could help explain the strength in employment gains even as the unemployment rate had remained roughly flat and wage pressures had eased.

BALANCE SHEET:

• The vast majority of participants judged would be prudent to begin slowing pace of balance sheet runoff "fairly soon".


• A few participants preferred to continue current pace of runoff until indicators showed reserves were nearing "ample level".


• Participants generally favoured reducing monthly runoff pace by roughly half from recent overall pace.


• Participants see little need to slow mortgage-backed securities runoff, preferring to adjust cap on Treasuries redemptions.


• Fed staff economic projection for March meeting was stronger than January's forecast, citing higher projected population due to immigration.

Via Federal Reserve

Reaction details (19:13)

• There has been no notable reaction to the FOMC minutes.

10 Apr 2024 - 19:00- Fixed IncomeData- Source: Newswires