Last FOMC Meeting Minutes was released (on) 20th Nov. Minutes of FOMC Meeting held on 17-18Dec will be released late by today evening. Lets read the important point discussed in the last FOMC meeting Minutes.
- Unemployment rate on Oct was 7.2%, prior 7.3% in Sept, which was within projection range of 7.1%-7.3%.
- Unemployment was expected to decline as expansion in economic activity was expected, which is slow for projected period.
- However, the committee will keep Federal fund target between 0-0.25percent, till unemployment rate is above 6.5% and Inflation below 2%.
- CPI declined to 0.7% on Oct, prior was 1.1% Sept, which was below the target level.
- Inflation rate of 2% is targeted by FOMC.
- As per FOMC Member, Inflation rate is below its expected level. However, they believe that in long term Inflation rate will come back at expected level.
December 18th Statement review:
- Committee decided to reduce Asset purchase program by $10billion in the beginning of January by reducing pace of mortgage backed securities to $35 billion per month from $40 billion and Longer Term Treasury to $40 billion per month from $45 billion.
What to look for in FOMC Meeting Minutes:
- What is going to be pace of tapering? : If it is going to be higher than expected than it will support USD in long run.
- Any change in long term inflation expectation?: Looking at inflation number, which is lower, we feel that it will remain low in short to medium term and long term expectations will remain anchored.