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Fed Minutes stick to the expected script – ANZ

Fed Minutes stick to the expected script – ANZ

he latest Fed minutes showed that although the debate about inflation remains alive and well (as it does most everywhere), a majority of FOMC participants continue to expect inflation to gradually rise to the 2% target over the medium term, explains the analysis team at ANZ.

Key Quotes

“The main market interest was in comments around the timetable for shrinking the Fed’s QE-bloated balance sheet. With the Fed staff raising their assessment of financial stability risks to “elevated” (from “notable”), it’s a key question. In the end, the door was kept open for a September announcement of a timetable. Settling on one will be quite a challenge, given evidence of robust internal debate on most every topic relevant to the decision. One expects the timetable will be highly conditional with a multitude of escape clauses as the Fed monitors the market response closely.”

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