9 Apr 2014
FOMC minutes: No changes mean to change something
FXStreet (San Francisco) - The Federal Open Market Committee's March 18-19 meeting's minute said that Committee members' forecasts for the likely timing of rate hikes overstated things. The FOMC is worried about what market is thinking they are thinking, so most participants favored providing an explicit indication in the statement that the new forward guidance, taken as a whole, did not imply a change in the Committee's policy intentions.
Fed officials remain to note that severe winter weather had push down the economic activity in the first quarter of 2014. Housing activity remained slow; further improvement, on balance, in labor market conditions.
In other news, the Fed would have had a secret meeting to change its unemployment rate threshold as they reached a general consensus that the 6.5% level for the first rate hike was outdated. "Most participants preferred replacing the numerical thresholds with a qualitative description of the factors that would influence the Committee's decision to begin raising the federal funds rate."
Key phrases:
For many participants, the outlook for economic activity over coming quarters had changed little, on balance, since the time of the December meeting.
Several participants indicated that recent economic news, although leading them to mark down somewhat their estimates of economic growth in late 2013 as well as their assessments of likely growth in the first quarter of 2014, had not prompted a significant revision of their projections of moderate economic growth over coming quarters.
Almost all participants agreed that it was appropriate at this meeting to update the forward guidance, in part because the unemployment rate was seen as likely to fall below its 6-1/2 percent threshold value before long. Most participants preferred replacing the numerical thresholds with a qualitative description of the factors that would influence the Committee's decision to begin raising the federal funds rate.
Most participants favored providing an explicit indication in the statement that the new forward guidance, taken as a whole, did not imply a change in the Committee's policy intentions, on the grounds that such an indication could help forestall misinterpretation of the new forward guidance.
Most participants favored providing information about the likely behavior of the federal funds rate after its first increase. A few participants, however, viewed the period of policy firming as likely to be far enough in the future that the Committee did not need to provide such information at this stage.
Fed officials remain to note that severe winter weather had push down the economic activity in the first quarter of 2014. Housing activity remained slow; further improvement, on balance, in labor market conditions.
In other news, the Fed would have had a secret meeting to change its unemployment rate threshold as they reached a general consensus that the 6.5% level for the first rate hike was outdated. "Most participants preferred replacing the numerical thresholds with a qualitative description of the factors that would influence the Committee's decision to begin raising the federal funds rate."
Key phrases:
For many participants, the outlook for economic activity over coming quarters had changed little, on balance, since the time of the December meeting.
Several participants indicated that recent economic news, although leading them to mark down somewhat their estimates of economic growth in late 2013 as well as their assessments of likely growth in the first quarter of 2014, had not prompted a significant revision of their projections of moderate economic growth over coming quarters.
Almost all participants agreed that it was appropriate at this meeting to update the forward guidance, in part because the unemployment rate was seen as likely to fall below its 6-1/2 percent threshold value before long. Most participants preferred replacing the numerical thresholds with a qualitative description of the factors that would influence the Committee's decision to begin raising the federal funds rate.
Most participants favored providing an explicit indication in the statement that the new forward guidance, taken as a whole, did not imply a change in the Committee's policy intentions, on the grounds that such an indication could help forestall misinterpretation of the new forward guidance.
Most participants favored providing information about the likely behavior of the federal funds rate after its first increase. A few participants, however, viewed the period of policy firming as likely to be far enough in the future that the Committee did not need to provide such information at this stage.