INSUBCONTINENT EXCLUSIVE:
reports affirmed their outlook, minutes of the Dec
10-11 Federal Open Market Committee released Friday in Washington showed
They also signaled policy would be on hold through 2020, which would keep the central bank on the sidelines during a United States
presidential election year.
Participants saw sustained economic expansion, labor market strength, and inflation near their 2% goal as the
most likely outcomes, in part because of their monetary policy support
A number said the economy was showing resilience amid global headwinds.
Fed officials worried that inflation continued to fall short of
their 2% target, the minutes said
record said.
Policy makers were also optimistic about the labor market, with participants remarking on indications that the unemployment
the last meeting, with four penciling in a quarter-point hike
A majority forecast at least one increase in 2021 and 2022
Not a single official forecast a rate cut in the next three years.
Officials also focused on their recent steps to calm money markets
following strains in September that sent overnight rates surging
$256 billion of temporary liquidity via open market repurchase operations over the end of the year to avoid a cash crunch
The final operation of 2019 saw just $25.6 billion pumped into the system, compared with a maximum available offering of $150 billion
committee:The Fed could consider expanding security purchases for reserve management to include coupon-bearing Treasury securities with a
short time to maturity if necessary to ease liquidity constraints in the Treasury bill market.The manager discussed expectations to
gradually transition away from active repo operations next year as bill purchases supply a larger base of reserves, though some repos might
be needed through April, when tax payments reduce reserves.It may be appropriate at some point to adjust rates on excess reserves and on
overnight reverse repurchase agreements.The Fed is currently buying $60 billion of Treasury bills a month to boost bank reserves and meet
longer-run liquidity demand.