Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
Reporting on key macro data at the time of release.
Real-time insight on key fixed income and fx markets.
- Emerging MarketsEmerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
- MNI ResearchMNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
- About Us
WASHINGTON (MNI) - The following are excerpts from the Federal Open
Market Committee minutes of the October 31-November 1 meeting, published
Some members expressed concerns about the outlook for inflation
expectations and inflation; they emphasized that, in considering the
timing of further adjustments in the federal funds rate, they would be
evaluating incoming information to assess the likelihood that recent low
readings on inflation were transitory and that inflation was on a
trajectory consistent with achieving the Committees 2 percent objective
over the medium term. Several other members, however, were reasonably
confident that the economy and inflation would evolve in coming months
such that an additional firming would likely be appropriate in the near
Many participants judged that much of the recent softness in core
inflation reflected temporary or idiosyncratic factors and that
inflation would begin to rise once the influence of these factors began
to wane. Most participants continued to think that the cyclical
pressures associated with a tightening labor market were likely to show
through to higher inflation over the medium term.
With core inflation readings continuing to surprise on the
downside, however, many participants observed that there was some
likelihood that inflation might remain below 2 percent for longer than
they currently expected, and they discussed possible reasons for the
recent short-fall. Several participants pointed to a diminished
responsiveness of inflation to resource utilization, to the
possibility that the degree of labor-market tightness was less than
currently estimated, or to lags in the response of inflation to greater
resource utilization as plausible explanations for the continued soft
readings on inflation. A few noted that secular influences, such as the
effect of technological innovation in disrupting existing business
models, were likely offsetting cyclical upward pressure on inflation and
contributing to belowtarget inflation.
In discussing the implications of these developments, several
participants expressed concern that the persistently weak inflation data
could lead to a decline in longer-term inflation expectations or may
have done so already; they pointed to low market-based measures of
inflation compensation, declines in some survey measures of inflation
expectations, or evidence from statistical models suggesting that the
underlying trend in inflation had fallen in recent years. In addition,
the possibility was raised that monetary policy actions or
communications over the past couple of years, while inflation was below
the Committees 2 percent objective, may have contributed to a decline
in longer-run inflation expectations below a level consistent with that
objective. Some other participants, however, noted that measures of
inflation expectations had remained stable this year despite the low
readings on inflation and judged that this stability should support the
return of inflation to the Committees objective.
** MNI Washington Bureau: (202)371-2121 **