“Still, participants stressed that the appropriate path of monetary policy would depend on economic and financial developments and their implications for the outlook and risks around them,” according to the minutes released on Wednesday.
Participants will “update their assessments on the appropriate scenario for the monetary policy stance at each meeting” as officials consider both interest rate hikes and plans to reduce Fed asset investments, according to the statements. minutes.
The document offered a more detailed account of the January 25-26 meeting, in which Fed officials agreed that it would “soon be appropriate” to raise the benchmark overnight rate from near zero, and also discussed plans to reduce the agency’s nearly $9 trillion balance sheet.
Investors expect the Fed to start raising rates in March with an initial half-percentage-point hike and to continue raising rates through the year.
Economic data released since the last meeting has reinforced the Fed’s readiness to act. January retail sales were strong with employers adding 467,000 jobs in the first month of the year, much more than expected. The most recent inflation figures showed no signs of moving away from the current 40-year high.
Last month, Fed officials also discussed plans to cut investments in Treasuries and mortgage-backed securities, issuing a set of broad principles to guide the cuts. Now they must work out the details of how much reduction to allow each month and when to start.
