Thursday, February 21, 2019

Patience, Says the Fed

The Federal Open Market Committee released minutes from its two-day January meeting on Wednesday. In the minutes, the Fed laid out more detail as to why it decided to be patient with monetary policy, and it looks like more rate hikes are off the table for the time being.

Following four rate hikes in 2018, the Fed announced last month that it would hit the pause button and keep its benchmark Fed funds rates steady at the 2.25 percent to 2.5 percent target range. But it was unclear how long the central bank planned on doing so.

Now we know a bit more detail. The FOMC meeting minutes included 13 mentions of the word “patient,” saying there were a “variety of considerations that supported a patient approach.” Furthermore, “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slowdown in Europe and China.”

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