Dissecting the Most Recent FOMC Minutes
During its most recent two day meeting, the FOMC discussed the domestic economy, markets, interest rates and its asset purchase program.
Key takeaways from the meeting:
1) The economy continues to improve, but there are still millions of unfilled jobs. Employment, according to the Fed, is a key metric in determining an appropriate time to begin adjusting its accommodative policies, including rate setting and asset purchases.
2) A key comment from Mr. Powell relates to he and his colleagues views on the pace of tapering. For example, in 2014, the Fed reduced its asset purchases over the course of a year. It wasn't until 14 months later that they began raising interest rates.
3) FOMC members are of the consensus they will begin reducing Mortgage Backed Security (MBS) purchases slightly before unloading its Treasury holdings.
4) Mr. Powell has suggested that current inflationary pressures are still transitory, and expects inflation readings to get even hotter as supply chain bottlenecks clear up.
The US total debt load is approaching $29 Trillion. Paying interest on this amount of money is stupefying. Raising rates even slightly will put officials in a very difficult position.
Lets make it a great day!