The Federal Reserve on Wednesday signaled that it could soon stop reducing the volume of assets on the balance sheet, however, representatives of the regulator's management still argue about how long the policy of “patience” they have adopted for raising interest rates will last.
At the moment, the regulator sees a slight risk in postponing the issue of interest rates and taking time to analyze growing risks, including slowing global growth, revealed the minutes of the January Fed meeting, published on Wednesday.
While some representatives of the Fed's leadership felt that a rate hike would be necessary only in case of an unexpected acceleration of inflation, a number of other participants noted that if the economy develops in the direction in which they expect, they will consider it expedient to increase the target range of federal funding rates later this year.
Such different views suggest that the US central bank can still continue the three-year policy of raising interest rates and at the moment it is just making a long pause. In January, the Fed surprised markets by reporting that it would be patient in the process of adjusting the target range of short-term interest rates, which now stands at 2.25-2.5 percent.
Suddenly, a peace-loving decision was made against the background of growing risks for the US economy, including a slowdown in the growth of Chinese and European economies and a weakening of the effect of tax reform in 2018.
At the same time, representatives of the Fed management seem to have really agreed on a plan that provides for maintaining a larger volume of assets on the balance sheet than it was in the past, the protocol showed.
“Almost all participants believe that it would be desirable to soon announce a plan to stop reducing assets on the balance sheet of the Federal Reserve System later this year,” the protocol says.
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