FOMC Minutes
Key snipets from the FOMC minutes: "Real personal consumption expenditures appeared to be increasing solidly." And they should continue to do so as the energy costs get passed on.
"some of the increase in energy costs had apparently passed through to prices of final goods and services... core CPI was moderate although some signs of pass-through of higher energy costs were evident..."
"recent increases in energy costs had pushed up producer prices in some sectors... the cumulative rise in energy and other costs had the potential to add to inflation pressures"
"Both overall and core consumer price inflation were projected to move higher in the first half of next year, reflecting the effects of higher energy prices"
"hurricane-related rebuilding would boost activity, especially in the near term, this stimulus increasingly would be countered by higher interest rates."
"possible increases in resource utilization had the potential to add to pressures on prices, especially in the absence of some further firming of policy."
"The federal funds rate had been boosted substantially, and, in the view of some members, it was now likely within a broad range of values that might turn out to be consistent with output remaining close to potential." But how close are we?
"resource markets could tighten further and inflation pressures build. Under these circumstances, and with policy having been accommodative for some time, inflation expectations could rise if monetary policy were not seen as responding to contain such risks." There is little slack and we reserve the right to bump further as needed.
"Although future action would depend on the incoming data, this characterization of the outlook for policy was seen by most members as indicating that, given the information now in hand, the number of additional firming steps required probably would not be large." would not be large is a subjective statement.
"Some members thought that the word "measured" was no longer necessary, but its retention for this meeting was seen as potentially useful to preclude a possible misinterpretation that the Committee now saw a significant possibility of adjusting policy in larger increments in the near future." this means 25 basis points will be the maximum as long as the word measured is included.
"In these circumstances, the Committee thought that policy should no longer be characterized as accommodative... with the indirect effects of increased energy prices still threatening to raise core inflation at least for a time, the Committee thought that additional policy firming at this meeting was appropriate to keep inflation and inflation expectations in check. Committee members generally anticipated that policy would likely need to be firmed further going forward." We will continue to raise rates.
Full FOMC Minutes
"some of the increase in energy costs had apparently passed through to prices of final goods and services... core CPI was moderate although some signs of pass-through of higher energy costs were evident..."
"recent increases in energy costs had pushed up producer prices in some sectors... the cumulative rise in energy and other costs had the potential to add to inflation pressures"
"Both overall and core consumer price inflation were projected to move higher in the first half of next year, reflecting the effects of higher energy prices"
"hurricane-related rebuilding would boost activity, especially in the near term, this stimulus increasingly would be countered by higher interest rates."
"possible increases in resource utilization had the potential to add to pressures on prices, especially in the absence of some further firming of policy."
"The federal funds rate had been boosted substantially, and, in the view of some members, it was now likely within a broad range of values that might turn out to be consistent with output remaining close to potential." But how close are we?
"resource markets could tighten further and inflation pressures build. Under these circumstances, and with policy having been accommodative for some time, inflation expectations could rise if monetary policy were not seen as responding to contain such risks." There is little slack and we reserve the right to bump further as needed.
"Although future action would depend on the incoming data, this characterization of the outlook for policy was seen by most members as indicating that, given the information now in hand, the number of additional firming steps required probably would not be large." would not be large is a subjective statement.
"Some members thought that the word "measured" was no longer necessary, but its retention for this meeting was seen as potentially useful to preclude a possible misinterpretation that the Committee now saw a significant possibility of adjusting policy in larger increments in the near future." this means 25 basis points will be the maximum as long as the word measured is included.
"In these circumstances, the Committee thought that policy should no longer be characterized as accommodative... with the indirect effects of increased energy prices still threatening to raise core inflation at least for a time, the Committee thought that additional policy firming at this meeting was appropriate to keep inflation and inflation expectations in check. Committee members generally anticipated that policy would likely need to be firmed further going forward." We will continue to raise rates.
Full FOMC Minutes
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