COVID | Monetary Policy & Inflation | US
Key points
• The Fed needs weaker financial markets to transmit policy tightening to the economy
• CPI inflation likely to continue to slow
Fed
There was limited incremental hawkishness in the Fed minutes. The statement, ‘it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated’ was in line with the increase in the dots in the Dec SEP. The minutes were also in line with my post meeting expectations, of liftoff at the March meeting.
Key points
• The Fed needs weaker financial markets to transmit policy tightening to the economy
• CPI inflation likely to continue to slow
Fed
There was limited incremental hawkishness in the Fed minutes. The statement, ‘it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated’ was in line with the increase in the dots in the Dec SEP. The minutes were also in line with my post meeting expectations, of liftoff at the March meeting.
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