Fed Releases Minutes Highlighting Inflation Concerns

The eagerly awaited Fed Minutes were just released, and everyone was excitedly awaiting the details. After the poor inflation data in the first quarter, investors feared more tightening from the Fed. Is this risk eliminated in the current environment?

Fed Minutes and Crypto

Fed saw poor PPI figures this month following the bad inflation data in the first quarter. Since producer inflation indirectly affects CPI, some members made troubling comments. Some members suggested that interest rates should not only stay high for longer but also be raised further. Fortunately, inflation dropped in April, and this month’s data gave investors a sigh of relief.

So, what details were included in the Fed Minutes? We can summarize the key points as follows:

• Meeting participants assessed that gaining more confidence in inflation sustainably moving toward 2% will take longer than previously anticipated.
• Almost all participants supported the decision to begin slowing the pace of the central bank’s securities holdings reduction; a few could have supported maintaining the current pace.
• Participants noted that the future policy path would depend on incoming data, evolving outlook, and risk balance.
• Many participants expressed uncertainties about the degree of policy restrictiveness.
• Many participants mentioned a willingness to tighten policy further if risks to the outlook materialize and justify such action.
• The Fed staff’s economic projection was similar to the March outlook, but it was noted that the deterioration in the financial conditions of low-income households could pose a greater-than-expected drag on activities.