Fx trading news: The Federal Reserve released the minutes of its latest monetary policy meeting, emphasizing that the current interest rate is at an appropriate level!


2020-02-20 10:30      from:CAPSTONE    author:Jack

Capstone forex trading news: In the early hours of Thursday, Beijing time, the Federal Reserve released the minutes of its latest monetary policy meeting. The minutes of the meeting pointed out that the Fed's current policy stance is appropriate for a period of time, but the new crown virus epidemic is an uncertain factor in the future, and members agreed that it is necessary to pay close attention to the development of the epidemic.
Regarding inflation, the minutes noted that the FOMC measured the pros and cons of adopting the 2% inflation target range, but members were concerned that introducing a symmetric inflation band might be misunderstood. Overall, the current interest rate level can play a role in pushing inflation to the 2% target.
It should be noted that in addition to discussing recent issues, the minutes of the meeting also reviewed the long-term direction of the policy. Fed officials discussed three scenarios involving the magnitude of inflation, suggesting that the Fed is willing to endure inflation above or below target levels for some time. The minutes noted that the Federal Reserve may finalize its strategic direction by the middle of this year.
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In terms of economic development and employment situation, members expected that the economy would continue to grow at an appropriate pace, but at present the economy is still below the maximum employment level. However, the minutes of the meeting also pointed out that members believe that the risk distribution of economic activities has improved compared with the previous monetary policy meeting. The Fed predicts that employment in the United States will grow at a healthy rate this year, and consumer spending may remain on a solid foundation.
However, the minutes of the meeting emphasized that the US economy still has risks, and a large part of the risks originate from external markets. The easing of trade tensions, the receding of the risk of Brexit and the stabilization of global economic growth are all factors that reduce downside risks, but members expect trade uncertainty to rise this year.
As for the repo market that the outside world is very concerned about, the minutes of the Fed meeting pointed out that the second quarter is expected to reduce the purchase of Treasury bills, and short-term repurchases may be withdrawn after April. The Fed believes that once the reserve level reaches a sufficient level, it is necessary to introduce conventional open market operations, because this can adapt to the growth trend of the Fed's debt and maintain sufficient reserves. The minutes noted that several members suggested that the Fed resume discussions on the establishment of standing repo facilities in the near future.

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