Fed flags end to balance sheet runoff, patience on rates

The Federal Reserve signaled they will soon lay out a plan to stop letting go of $4 trillion in bonds and other assets, but policymakers are still debating how long their newly adopted “patient” stance on U.S. rates policy will last.

For now, policymakers see little risk to leaving interest rates alone while they take time to assess rising risks, including a global slowdown, according to the Fed’s minutes from their Jan. 29-30 meeting.

Though “several” participants thought a rate increase would be necessary only if inflation unexpectedly surged, “several other participants indicated that, if the economy evolved as they expected, they would view it as appropriate to raise the target range for the federal funds rate later this year.”

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Re-disseminated by The Asian Banker from Reuters

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