Jan 29 FOMC Minutes: Hold Rates Steady To.......>

FED: Jan 29 FOMC Minutes: Hold Rates Steady To Support Economy

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- With a new coronavirus outbreak warranting "close watching," Fed 

officials in late January viewed current rates policy as "likely to 

remain appropriate for a time" amid easing trade tensions and other 

global risks receding, according to the Jan meeting minutes. 

- "Maintaining the current policy stance for a time could be helpful in

supporting U.S. economic activity and employment in the face of global 

developments that have been weighing on spending decisions." 

- NY Fed proposed phasing out term repo operations after April, 

slowing bills purchases in Q2 and gradually lifting minimum bid rate on 

repo operations. Reserves are expected to be above USD1.5tln before 

April. Officials indicated comfort with the plan. 

- COVID-19 discussion is by now out of date, but Fed staff noted it 

had "emerged as a new risk to the global growth outlook," which 

officials agreed warranted close watching. 

- Framework discussions focused on whether introducing an inflation 

range could be helpful. Officials generally thought a symmetric range 

might be misinterpreted as comfort with undershooting their target. 

There was some support for a temporary asymmetric "operational range" 

with 2% at or near the lower end of the range to drive home the message 

that Fed wants inflation to average 2% over time.