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The Fed left rates unchanged at the Sept meeting.
Headlines from the minutes (full text):
- Many participants saw downside risks to economic activity and upside risks to the unemployment rate
- Vast majority of participants just future path of economy as highly uncertain
- More evidence needed to be confident price pressures ebbing
- Several participants commented that, with the policy rate likely at or near its peak, the focus of monetary policy decisions and communications should shift from how high to raise the policy rate to how long to hold the policy rate at restrictive levels
- Participants stressed that current inflation remained unacceptably high while acknowledging that it had moderated somewhat over the past year.
- All participants agreed that policy should remain restrictive for some time until the Committee is confident that inflation is moving down sustainably toward its objective
- Several participants noted that the process of balance sheet runoff could continue for some time, even after the Committee begins to reduce the target range for the federal funds rate.
- The economic forecast prepared by the staff for the September FOMC meeting was stronger than the July projection, as consumer and business spending appeared to be more resilient to tight financial conditions than previously expected
- The staff assumed that GDP growth for the rest of this year would be damped a bit by the autoworkers’ strike, with these effects unwound by a small boost to GDP growth next year. The size and timing of these effects were highly uncertain.
The market reaction to the minutes has been negligible.