FOMC meeting minutes for May 2022: inflation risks are skewed to the upside

For the May 2022 meeting minutes click here

• All participant voted for 50 basis point hike
• Several participants commented on the challenges that monetary policy faced in restoring price stability while also maintaining strong labor market conditions
• China lockdowns and Ukraine increased risks
• restrictive stance on monetary policy may well become appropriate
• should assess the risk the economy later this year after the rate hikes
• Fed should move expeditiously to neutral
• some felt inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term expectations could become unanchored
• 50 basis point increase is likely appropriate to the next couple of meetings
• a number supported selling mortgage-backed securities
• several thought the potential for unanticipated effects in the financial markets from the run off of the balance sheet
• concerned about the risks from higher income commodity prices
• many expect tight labor market and wage pressures to continue for some time
• China and the Ukraine war posed heightened risks for both United States and and economies around the world
• new inflation pressures received from China as well as the Ukraine war, and were likely to weigh on economic activity
• Members judged that the implications of the war for the U.S. economy were highly uncertain
• higher wages and input prices were being passed on to consumers
• inflation risk being skewed to the upside
• Many participants judged that expediting the removal of policy accommodation would leave the Committee well positioned later this year to assess the effects of policy firming and the extent to which economic developments warranted policy adjustments.
• COVID-related lockdowns in China were likely to exacerbate supply chain disruptions
• although overall economic activity had edged down in the first quarter, household spending and business fixed investment had remained strong
• Job gains had been robust in recent months, and the unemployment rate had declined substantially.
• inflation remained elevated, reflecting continued supply and demand imbalances, higher energy prices, and broader price pressures.