Federal Reserve officials say President Joe Biden’s $ 1.9tn fiscal stimulus is almost identical to inflation, which has unexpectedly reduced the risk of an unexpectedly high inflation.
According to minutes from the March meeting of the Federal Open Market Committee on Wednesday, “most participants noted that they view the risks of the outlook for inflation as broadly balanced,” in a report released Wednesday in the minutes of the Federal Open Market Committee meeting.
“Several commented that supply disruptions and strong demand could push up prices more than expected. Most participants commented that the factors that contributed to lower inflation during the previous expansion could put a lower pressure on inflation again than expected. ”
At its March meeting, the Fed revised up for growth and sharpened its forecast Inflation. In minutes, however, officials indicated no urgency to begin withdrawing their over-adjusted financial aid, which included b 120 billion in asset purchases per month and zero interest rates.
“Participants noted that it would take some time for the committee to make significant progress towards maximum employment and price-stability, and that asset purchases would continue at least at current levels, in line with the committee’s results-oriented direction,” minutes later.
Jim O’Sullivan, chief U.S. macro strategist at TD Securities, said: “More specifically, the message is that there is no rush to tap or tighten.”
Officials also warned of an uncertain “improvement” surrounding the economic outlook.
“The uncertain course of the epidemic, especially the emergence of more contagious strains of the coronavirus in the United States and elsewhere, has still shown the risk of loss of economic outlook,” a few minutes said.
The March meeting was held against the backdrop of rising spending on rising US debt, which has spread to investors and sparked speculation about the Fed’s willingness to intervene through policy messages to raise the Fed’s message.
The 10-year Treasury note rose 1.78 percent last month, up from 0.9 percent at the start of the year. Since then, the yield has dropped to 1.65 percent.
With the market growing Pricing The central bank is likely to be forced to tighten its over-adjusted monetary policy a year earlier than previously expected. Expected strong counterattack, Investors are joking about a sell-off to speed up the US government’s debt. Yields have risen as prices have fallen.
The FOMC meeting included a wide-ranging debate on the causes and effects of yield increases, although policymakers continue to judge the financial situation as “extremely appropriate”.
“Participants commented on the significant increase in long-term Treasury yields that occurred over the inter-border period and generally viewed it as a reflection of the improved economic outlook, somewhat firmer in inflation expectations, and increased expectations of Treasury debt repayment,” according to the minutes.
However, they warned: “The volatile situation in the treasury market or the continued increase in yields that could jeopardize progress in achieving the committee’s goals has been seen as a cause for concern.”
Only a few participants said they were concerned about “taking extra risks and creating financial imbalances.”