FLASH: The Trump Policy at Work for Americans
The Key takeaways from the FOMC Minutes from the 29-30 January meeting, as follows:
- There was widespread agreement for the FOMC to end shrinkage of the $4-T balance sheet by the end of the year. The timetable ends uncertainty over whether shedding assets would further tighten financial conditions.
- The FOMC said it is throwing out the December forecasts for 2 rate hikes this year, and instead many on the committee were unsure whether any adjustments would be needed.
- The committee is taking a patient approach in light of increasing downside risks, notably slowing global growth and turmoil in financial markets. Some FOMC participants were cutting their estimates for Y 2019 growth.
- The Fed becoming more Dovish in its view on inflation, noting the outlook had become more muted compared to last year even though the US labor market has been tightening.
- US stocks were up on the day, while US Treasuries finished lower after release of the mins, indicating not a big surprise from investors.
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