In the minutes of the March 15-16 FOMC meeting, many participants said they would have preferred a 50bps hike because inflation was well above target, and risks were to the upside. However, a number of them pointed out the “greater near-term uncertainty” associated with the Russia invasion of Ukraine. Thus, a 25bps hike was taken at that meeting.
However, “many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified.
Meanwhile “all participants” agreed that balance sheet runoff should start “at a coming meeting”. ” Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant.
