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The US Federal Reserve released a summary of the June meeting, stating that in the case of a very strong US economy, it is necessary to proceed with a gradual rise in rates while paying attention to risks such as than commercial policy. After the publication of the minutes, the Fed raised interest rates by 25 basis points in September of this year, to a probability of 77.7% to 2% to 2.25% and 77%, 7% before the publication of the minutes. %%; The probability of raising interest rates to the range above in December is 39.4%, and 40.3% before the announcement.
The Fed's report indicated that many policymakers have stated that a gradual rise in rates could allow the federal funds rate to exceed the neutral interest rate in 2019. Almost all policymakers supported the FOMC to raise interest rates in June, and one member said that delays in rising interest rates could help raise inflation expectations.
Some decision makers have stated that it may soon be appropriate to adjust some of the wording of the policy statement regarding "current policy easing". Some politicians said the Fed could hope to discuss how best to implement monetary policy in the face of a slight decline in balance sheet size.
Monetary Policy Makers of the Open Market Committee (FOMC) stated that the wording of the forward guidance no longer applies when the US economy is performing well and the trajectory interest rate is expected. Even if forward-looking guidance is removed from the resolution's statement, this does not mean that the Fed's monetary policy has changed.
The minutes of the meeting emphasized that trade policies pose risks. Most policymakers believe that the risks posed by trade policies have intensified and that the situation is worrying. Many corporate contracts reflect business concerns that rates may affect investment and some believe that capital spending has reduced political and economic events in Europe and some emerging markets, posing a negative risk to growth. economic and inflation.
If monetary policy fails to stabilize its growth momentum, it will lead to a significant downward trend in the economy. Some members are concerned that the long-term functioning of the economy at a faster pace than potential will increase inflationary pressures or financial imbalances, which will eventually lead to a decline.
In addition, policymakers discussed the flattening of the US bond yield curve, believing that there is a risk of recession based on the federal funds rate and interest rate expectations. interest for the next quarters.
A small number of policymakers think that if inflation is temporarily above 2%, this can help anchor inflation expectations, and it is too early to declare the victory of the 'inflation'. inflation.
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