The Federal Reserve released the minutes of the May meeting: uncertainty in the economic outlook has further intensified, and the risks of rising unemployment and inflation have increased
According to CCTV News, on May 28 local time, the Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) meeting held on May 6-7. The minutes indicate that the Federal Reserve agreed to maintain the target range for the federal funds rate at 4.25%-4.5%. Participants unanimously agreed that when considering the magnitude and timing of further adjustments to the federal funds rate target range, the committee would carefully assess subsequent data, the evolving outlook, and risk balance. The minutes state that in evaluating the appropriate monetary policy stance, the committee will continue to monitor the impact of future information on the economic outlook. If risks emerge that could hinder the committee's goals, they will be prepared to adjust the monetary policy stance as appropriate. Participants noted that their assessment would consider a wide range of information, including labor market conditions, inflation pressures and expectations, as well as developments in financial and international situations.The committee's assessment indicated that uncertainty regarding the economic outlook has further intensified, with rising risks of increased unemployment and inflation. Participants pointed out that if inflation persists while economic growth and employment prospects weaken, the committee may face difficult trade-offs. The ultimate adjustment of government policies and their impact on the economy are highly uncertain. Against this backdrop, all participants agreed that maintaining the federal funds rate target range at 4.25%-4.5% is appropriate. In considering the monetary policy outlook, participants unanimously agreed that given the robust economic growth and labor market, the committee is fully capable of waiting for a clearer outlook on inflation and economic activity. It is appropriate to adopt a cautious approach until the net economic effects of a series of government policy adjustments become clearer.Additionally, according to Jinshi News, the Federal Reserve minutes noted that the benchmark policy path implied by option prices (representing the mainstream market expectations) slightly shifted downward during this period, suggesting a potential rate cut of 1 to 2 times (25 basis points each) by the end of the year.