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Fed's flags run out of balance, patience at rates



(Reuters) – The Federal Reserve signaled on Wednesday that the release of 4 trillion will soon be suspended. Dol US bonds and other assets, but politicians are still discussing how long their new position on "patients" in the US policy will last.

So far, politicians see little risk of leaving interest rates alone, while they need time to assess the rising risks, including the global slowdown, according to the Fed's protocol from their meeting on January 29-30, published on Wednesday.

Although "several" participants believed that an increase in the tariff would be necessary only if inflation suddenly increased, "several other participants noted that if the economy develops as expected, they consider it advisable to increase the target range for the federal

These divergences see that the central bank has not yet completed its three-year campaign to raise interest rates, but simply put it on a long pause. In January, the Fed was surprised by the markets, saying that it would patiently adjust its target range on a short-term basis Interesting rates currently range from 2.25% to 2.5%.

An unexpectedly decisive decision came against the backdrop of growing risks for the US economy, including the slowdown in China's and Europe's economy and the reduction of tax incentives in the US in 201

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Varieties of Fed politicians who say after the Fed preservation period insisted that the economy is in a good place.

But doubts remained when US dealers on interest rates increased rates that the Fed will have to make politics easier in early next year to counter the economic downturn.

The tone of the protocols was "undoubtedly vague," according to Ward McCarthy, economist at Jefferies LLC.

ACTIVE RESPONSIBILITY

Meanwhile, the Fed policy seems to be around the plan to keep its balance constantly bigger than it ever was in the past.

"Almost all participants believed that it would be desirable to announce too long a plan to stop the reduction of assets of the Federal Reserve at the end of this year," the report says.

The Fed absorbed government bonds and mortgages after a downturn in 2007-09, but politicians began to wipe these stocks in the last months of 2017.

FILE PHOTO: The guard walks before the image of the Federal Reserve after a two-day meeting of the Open Market Political Committees (FOMC) in Washington, DC, on March 16, 2016. REUTERS / Kevin / File Photo

Researchers presented options at the meeting to "significantly slow down" the Fed balance sheet, "at some point during the second half of this year." At present, the stock is limited to $ 50 billion a month.

Bob Miller, head of US multi-sectoral fixed income at BlackRock Inc, said he is now awaiting a Fed balance sheet for May's minutes, a decision on this issue by June, and a Fed termination of the Fed until October, if not July. It will help the US financial conditions and markets, he said. "The fact is that the Committee has held three consecutive political meetings, where the balance was discussed in detail, and to us, which testifies to a certain urgency in solving issues concerning its future," Miller said in a note.

Editing Chizu Nomiyama and Susan Thomas

Our Standards: Principles of Trust to Thomson Reuters.

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