FOMC meeting minutes: vast majority saw the growth gradually cooling

The FOMC meeting minutes have been released from the June meeting:

• Vast majority of participants at Fed's June 11-12 meeting assessed U.S. economic growth appeared to be gradually cooling, minutes show
• Most participants saw current policy stance as restrictive
• A number of participants said policy should stand ready to respond to unexpected economic weakness
• Several specifically emphasized further demand weakening could generate a larger unemployment response than in recent past
• Several participants said if inflation were to persist at elevated level or rise further, funds rate might need to be raised
• Participants saw 'modest further progress' toward committee's 2% inflation objective in recent months
• May's CPI reading was seen by participants as providing additional evidence of progress toward inflation goal
• Participants suggested a number of developments in product and labor markets supported their judgment that price pressures were diminishing
• Fed staff economic projection similar to that of previous policy meeting
• Participants saw 'modest further progress' toward committee's 2% inflation objective in recent months
• Several participants said if inflation were to persist at elevated level or rise further, funds rate might need to be raised
• May's CPI reading was seen by participants as providing additional evidence of progress toward inflation goal
• Participants suggested a number of developments in product and labor markets supported their judgment that price pressures were diminishing
• Fed staff economic projection similar to that of previous policy meeting

The ChatGPT parsing of "_____________ participants" came away with the following:

• A few participants:

  • "A few participants also highlighted the strong increases recorded this year in core import prices."
  • "A few participants emphasized that nominal wage growth, though still above rates consistent with price stability, had declined, notably in labor-intensive sectors."
  • "A few participants also noted reports that various retailers had cut prices and offered discounts."
  • "A few participants indicated that business contacts were reporting less difficulty in hiring and retaining workers."

• Some participants:

  • "Some participants commented that sustained achievement of the 2 percent inflation objective would be aided by lower overall services price inflation, and some noted that shelter price inflation had so far been slow to come down."
  • "In considering recent payrolls data, some participants observed that, although increases in payrolls had continued to be strong, the monthly increase in employment consistent with labor market equilibrium might now be higher than in the past because of immigration."
  • "Some participants observed that, with the risks to the Committee’s dual-mandate goals having now come into better balance, labor market conditions would need careful monitoring."
  • "Some participants highlighted reasons why inflation could remain above 2 percent for longer than expected."
  • "Some participants noted that there was uncertainty about the degree of restrictiveness of current policy."

• Several participants:

  • "Several participants suggested that the establishment survey may have overstated actual job gains."
  • "Several participants remarked that a variety of indicators, including wage gains for job switchers, suggested that nominal wage growth was slowing, consistent with easing labor market pressures."
  • "Several participants noted that financial market reactions to data and feedback received from contacts suggested that the Committee’s policy approach was generally well understood."
  • "Several participants observed that, were inflation to persist at an elevated level or to increase further, the target range for the federal funds rate might need to be raised."
  • "Several participants emphasized that with the labor market normalizing, a further weakening of demand may now generate a larger unemployment response than in the recent past when lower demand for labor was felt relatively more through fewer job openings."

• Many participants:

  • "Many participants noted that labor supply had been boosted by increased labor force participation rates as well as by immigration."
  • "Many participants observed that, in contrast, lower- and moderate-income households were encountering increasing strains as they attempted to meet higher living costs after having largely run down savings accumulated during the pandemic."

• A number of participants:

  • "A number of participants noted that, although the labor market remained strong, the ratio of vacancies to unemployment had returned to pre-pandemic levels and there was some risk that further cooling in labor market conditions could be associated with an increased pace of layoffs."
  • "Participants cited a number of downside risks to economic activity, including those associated with a sharper-than-anticipated slowing in aggregate demand alongside a marked deterioration in labor market conditions, or with strains on lower- and moderate-income households' budgets leading to an abrupt curtailment of consumer spending."

• Most participants:

  • "The vast majority of participants assessed that growth in economic activity appeared to be gradually cooling, and most participants remarked that they viewed the current policy stance as restrictive."