Dec 11 FOMC Minutes: Likely On Hold 'For A......>

FED: Dec 11 FOMC Minutes: Likely On Hold 'For A Time'

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- FOMC members saw current stance of policy as "likely to remain 

appropriate for a time" as long as data comes in as expected and barring 

any "material reassessment of the outlook." 

- Expected to gradually transition away from active repo operations 

around mid-January as bill purchases supply larger base of reserves

- SOMA manager suggests upward technical adjustment to IOER 'at some 

point' may be appropriate. 

- If future Treasury bill purchases have large effect on market 

liquidity, Fed could consider buying Treasury coupons for reserve 

management purposes, SOMA manager says.

- NY Fed also to revise foreign repo pool rate to be in line with 

overnight reverse repo rates

- Staying on hold would allow FOMC to assess effects of cuts and 

communications and help cushion economy from global developments. 

"Various" officials concerned longer term inflation expectations too low.

- A few officials concerned statement language alluding to 

inflation "near 2%" could be misinterpreted as comfort with below-2% 

inflation. Along these lines, one takeaway from Fed Listens is Fed needs 

to better communicate commitment to its inflation target and back it up 

with actions and results. 

- Will not reaffirm Statement on Longer Run Goals, Policy Strategy in 

Jan meeting; to revisit mid-year near conclusion of framework review.