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July 9th - Nick Timiraos, a well-known mouthpiece for the Federal Reserve, stated that even the most hawkish Fed officials did not actively push for action in June. According to the meeting minutes, some participants believed a rate hike was necessary at the June meeting, but supported maintaining the status quo. This suggests that the disagreement in the forecasts was more about how future trends might develop than what measures should be taken now.Market news: British Prime Minister Starmer said he will continue to communicate with Trump even after stepping down as Prime Minister.The U.S. Treasury Department reported that in the latest bi-weekly reporting period, investment funds purchased $50.626 billion in 5-year U.S. Treasury securities maturing on June 30, 2031, slightly lower than the $50.847 billion in the previous month. Foreign investors purchased $8.865 billion in 5-year U.S. Treasury securities maturing on June 30, 2031, slightly lower than the $8.946 billion in the previous month.The U.S. Treasury Department reported that in the latest bi-weekly reporting period, investment funds purchased $31.559 billion in 7-year U.S. Treasury securities maturing on June 30, 2033, down from $32.925 billion in the previous month. Foreign investors purchased $5.864 billion in 7-year U.S. Treasury securities maturing on June 30, 2033, up from $5.651 billion in the previous month.The U.S. Treasury Department reported that in the latest bi-weekly reporting period, investment funds purchased $53.459 billion in 2-year U.S. Treasury securities maturing on June 30, 2038, up from $48.203 billion in the previous month. Foreign investors purchased $6.942 billion in 2-year U.S. Treasury securities maturing on June 30, 2038, down from $9.923 billion in the previous month.

The Devil Is In The Details: Gold Analysis - Federal Reserve Minutes

Larissa Barlow

Apr 07, 2022 10:33

Analyses of Federal Reserve Minutes 

While both the FOMC statement and Chairman Powell's press conference provide market participants with information about the FOMC's updated and revised monetary policy, it is the release of the minutes that provides investors with significantly greater clarity and understanding. The devil, as they say, is in the details.

 

The Federal Reserve issued the official minutes from its March FOMC meeting today, providing insight into the central bank's current plans to begin unwinding its balance sheet assets. Beginning in March 2020, the Federal Reserve will add around $4.6 trillion to its balance sheet by purchasing $120 billion monthly in mortgage-backed securities ($40 billion) and US Treasury securities ($80 billion), bringing their total to just over $9 trillion.

 

According to Federal Reserve Governor Lael Brainard, the Fed intends to employ a mix of interest rate rises and a quick run-off of the balance sheet to bring US monetary policy closer to neutral later this year.

 

However, the minutes released today imply that the Federal Reserve will unwind around $3 trillion over the next three years, reducing its $9 trillion balance sheet to $6 trillion. While the Fed appears to be indicating a quick runoff of its balance sheet, the reality is that the Federal Reserve's balance sheet will be nearly $2 trillion larger than it was prior to the epidemic.

 

"Participants continued their discussion on plans to reduce the size of the Federal Reserve's balance sheet in a manner consistent with the methodology outlined in the Committee's Principles for Reducing the Size of the Federal Reserve's Balance Sheet, announced following its January meeting."

 

Additionally, the minutes stated, "While no decision was made regarding the Committee's plan to reduce the Federal Reserve's balance sheet at this meeting, participants agreed that significant progress had been made on the plan and that the Committee was well positioned to begin the process of reducing the balance sheet's size as soon as after the conclusion of its upcoming May meeting."


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