Fed minutes from the recent policy meeting indicated that officials are ready to move ahead with multiple 50 basis points interest rate hikes.
- The May 3-4 session projected that the rate-setting FOMC is likely to approve a half percentage point hike and implement a plan to reduce the central bank’s $9 trillion balance sheet.
- The Federal Open Market Committee stated that the policy may have to move past neutral and into a restrictive zone.
- On the balance sheet aspect, the plan will enable a capped level of proceeds to roll off every month, a number that could hit $95 billion by August including $60B in Treasuries and $35B for mortgages.
The Fed minutes signal that members are optimistic they can bring down inflation but also worried about financial stability risks.
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Source: Federal Open Market Committee
