The minutes of the January FOMC meeting contained little surprises. Fed acknowledged that ” recent inflation readings had continued to significantly exceed the Committee’s longer-run goal and elevated inflation was persisting longer than they had anticipated.” And, ” elevated inflation was a burden on U.S. households, particularly those who were least able to pay higher prices for essential goods and services.”
Most participants noted, “if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation at a faster pace than they currently anticipate.” But, “the appropriate path of policy would depend on economic and financial developments and their implications for the outlook and the risks around the outlook.”
Fed officials “will be updating their assessments of the appropriate setting for the policy stance at each meeting.”
Meanwhile, ” in light of the current high level of the Federal Reserve’s securities holdings, a significant reduction in the size of the balance sheet would likely be appropriate.”
