Officials at the meeting indicated that inflation gauges "had been higher and were more persistent than previously anticipated," the minutes stated. However, officials also indicated that they foresee up to three quarter-percentage point increases in 2022, as well as another three hikes in 2023 and two more the year after that. Rate hikes, tapering aheadĪs expected, the Fed's policymaking group following the December meeting kept its benchmark interest rate anchored near zero. Former President Donald Trump was a vocal critic of the program, sometimes referred to as "quantitative tightening," as he lambasted Fed officials. In all, the reduction amount to only about $600 billion. The program was intended to get the balance sheet down considerably but was short-circuited by global economic weakness in 2019, followed by the pandemic crisis in 2020. The central bank started by allowing $10 billion of Treasurys and mortgage-backed securities each quarter to roll off, increasing by that much each period until the caps reached $50 billion. This time, it looks like they're ready to go."ĭuring that 2017-19 reduction, the Fed allowed a capped level of proceeds from the bonds it holds roll off each month while reinvesting the rest. "The fact that almost all participants agreed that it was appropriate to initiate the balance sheet runoff after the first increase in the target range for the fed funds rate implies that there's not a big appetite for 'let's wait and see.'" Jones added. This was a pretty serious conversation," Kathy Jones, chief fixed income strategist at Charles Schwab, said of the minutes, which had a special section titled "Discussion of Policy Normalization Considerations." Obviously, there was a fairly lengthy discussion. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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