- Well positioned to wait for more clarity on inflation/economy
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Participants agreed that uncertainty about the outlook had increased and it was appropriate to take a cautious approach to monetary policy
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Participants agreed that risk of higher inflation and higher unemployment had risen
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Participants at the May 6–7 meeting agreed they were well positioned to wait for more clarity on the outlook
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Participants agreed that risks of higher inflation and higher unemployment had risen
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Participants agreed that uncertainty about the outlook had increased and it was appropriate to take a cautious approach to monetary policy
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Almost all participants commented on the risk that inflation could prove more persistent than expected
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Participants noted they may face “difficult tradeoffs” if inflation proved more persistent while outlooks for growth and employment weakened
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Participants saw uncertainty about their economic outlooks as unusually elevated
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Staff projection for 2025 and 2026 GDP growth was weaker than their estimate at the March meeting
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Staff cited tariff policies as implying a larger drag on activity than policies they had assumed in their prior forecast
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Committee voted to renew dollar and foreign currency swap lines
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These participants noted that a durable shift in such correlations or a diminution of perceived safe-haven status of U.S. assets could have lasting implications for the economy
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Some participants commented on changes in typical correlations across asset prices in the first half of April
The meeting was before the lowering of the China tariffs along with other fiscal issues since then. However Fed officials are pretty adamant that uncertainty remains high and this is likely to keep the Fed on hold until that time where they can assess tariffs or lack thereof, inflation, the employment situation and the disparity between the soft and hard economic data which are diverging
This article was written by Greg Michalowski at www.forexlive.com.
