FOMC minutes from Dec 18-19 meeting show the....>

FED: FOMC minutes from Dec 18-19 meeting show the committee mostly 

agreed on the December hike, but also that they could "afford to be 

patient" on future policy firming given the lack of inflation pressures. 

A few participants, did not want a rate hike in December, noting the 

absence of inflation pressures.

- The FOMC did note the impact of financial market volatility and global 

growth concerns, reiterating that policy is "not on a preset course" and 

that the pace and end-point of future increases is not known. A couple 

of participants noted that tighter financial conditions do not appear to 

have impacted real activity yet, but that further tightening in 

conditions could impact household and business spending.

 - The addition of "judges" was to emphasize data-dependency and the 

addition of "some" to the further gradual increases statement to 

indicate that the FOMC "judged that a relatively limited amount of 

additional tightening likely would be appropriate." Several participants 

felt it will be needed in coming meetings to remove forward guidance 

completely. 

- The minutes show no immediate need to end the balance sheet reduction 

program with bank reserve supply "still ample." They did express 

concerns about controlling rates, with further technical adjustments to 

the IOER or using the discount window as options for keeping EFFR within 

the target range. They have asked the staff to look at options.

- A further discussion of the long run operating regime showed them 

considering building a buffer of reserves above minimum needed for 

policy operations, suggesting the possibility of a larger balance sheet.