ChainCatcher reported that according to Cailianshe, at 2 a.m. Beijing time on Thursday, the Federal Reserve released the minutes of its policy meeting from April 30 to May 1. As expected by the market, Federal Reserve officials emphasized that based on disappointing inflation data, the policy interest rate needs to be maintained at the current level for a longer period than previously expected.
In the resolution released on May 1, the Federal Reserve's Monetary Policy Committee kept the benchmark interest rate unchanged at 5.25%-5.50% for the sixth consecutive time. At the same time, it announced that starting from June, the pace of shrinking Treasury bond holdings would be reduced from US$60 billion per month to US$25 billion.
The minutes of the meeting said that the members attending the meeting believed that compared with the continued slowdown in inflation last year, there was a lack of progress in recent months in inflation falling further towards the 2% target. Although some members tried to use "unusually large seasonal distortions to cause the January data to rise" or "some items with long-term price fluctuations to push up inflation", some members pointed out that "price increases are widespread and you should not ignore them too much."
After a series of discussions, the committee members came to the most important conclusion of the entire report: interest rate cuts may have to wait. Participants pointed out that they continue to expect inflation to return to 2% in the medium term, but recent data have not increased their confidence in the decline in inflation. Therefore, the process of reducing inflation may take longer than previously expected. There are even "several participants" who said that if the risk of further rising inflation manifests itself in some form, they are willing to tighten policy further. All officials agreed that it would not be appropriate to cut interest rates until they have greater confidence that inflation has fallen to 2%.
