U.S. Federal Reserve officials at their last meeting agreed that their current patient approach to setting monetary policy could remain in place "for some time", a further sign policymakers see little need to change rates in either direction.
At that point, with USA growth continuing, inflation "muted", and some global risks appearing to have eased, "members observed that a patient approach.would likely remain appropriate for some time.even if global economic and financial conditions continued to improve".
But overall "it appears as though the Fed is exactly where they want to be and don't have to lean one way or the other", said Art Hogan, chief market strategist at National Securities in NY.
Risks to the US economic outlook, including trade uncertainty and Brexit, have receded but are still present, the US Federal Reserve said Wednesday.
Why is the Fed being patient about interest rates?"A number of participants observed that some of the risks and uncertainties that had surrounded their outlooks earlier in the year had moderated, including those related to the global economic outlook, Brexit, and trade negotiations", the minutes said.
"China has a lot to gain form establishing credibility on trade". By controlling short-term rates, the Fed hopes to influence the broader economy to maximize employment and keep inflation at its target.
He also weighed in on the Fed's recent decision to call an end to its programme for policy normalisation, saying that it was "likely appropriate" given how rates in the USA were "relatively high" versus Europe and Japan and the fact that its balance sheet could not return to its pre-crisis level due to various considerations.
That "may have contributed to somewhat more sustained upward pressure on the federal funds rate than had been experienced in recent years around tax-payment dates", the Fed's records showed.
The latest minutes of the US Federal Reserve's policy meeting show many participants took issue with President Donald Trump's call for an interest rate cut. There is going to have to be significant deterioration in growth and a notable dip in inflation that's not due to transitory factors to cut rates.