Summary statements by members of the FOMC before Minutes

hello traders,

Today at 20:00 Polish time we met minutes of the last FOMC meeting, which took place late last month. Then the Fed decided to once again reduce the asset purchase program by another $ 10 billion to $ 65 billion per month.

Here is an expression of individual members of the Committee, which took place after the January meeting. They were divided into different categories. And at the bottom I place the most important issues of Minutes.

Asset purchase program QE:

Richard Fisher (Dallas) - Until we see clear signs of economic weakness or a significant deflation, I will vote for further QE by a further reduction of $ 10 billion (14.02)

Janet Yellen - If the incoming information will support the expectations of the committee as to improve the situation on the labor market and the return of inflation to the long-term goal, the committee probably will reduce the asset purchase program at their next meetings. (11.02)

Eric Rosengren (Boston) - We are still far from the historical levels of use of labor resources and as a result is expected that those responsible for monetary policy will focus on the problem (05.02)

Charles Plosser (Philadelphia) - I would like to early termination of QE (5.02)

Dennis Lockhart (Atlanta) - I look forward to the end of the asset purchase program in Q4 of this year. (5.02)

Jeffrey Lacker (Richmond) - would have to be significant complications to pause pace cuts program. (4.02)

Charles Evans (Chicago) - Cutting a further 10 billion is a good option to reduce the chances of the program and in the coming months. (4.02)

Esther George (Kansas City) - FOMC will continue its policy as long as GDP and employment growth will slow and inflation will remain low. I am afraid that this action may have significant long-term costs. (31.12.13)

Interest rates:

Yellen - We need data to support the consideration of interest rate increases.

Rosengren - The stabilization of interest rates, the best way to strengthen the economy.

Lockhart - In my opinion interest rates should remain at their current levels.

Plosser - should complete the asset purchase program to consider raising interest rates.

Lacker - There will be a surprise, the FOMC will not raise interest rates.

Evans - Interest rates are at their current levels since 2008 and should be so for some time.

Forward guidance:

Bullard - Because of the the lower levels of the unemployment rate, I believe that we should return to a more traditional policy.

Plosser - There was no information about what the reaction after exceeding 6.5%. Information related to the fact that it will not increase before reaching this level.

Lockhart - The policy objectives require revision, access to the level of 6.5% is a good argument for that.

Lacker - FOMC should update the message to be able to effectively assess the policy.

Fisher - We need to update the forward guidance targets.

Inflation:

Bullard - expect a rise in inflation in 2014.

Yellen - Inflation below the target of FOMC, mainly due to temporary factors.

Rosengren - Low inflation allows you to keep interest rates at low levels, which accelerates the growth rate of the labor market.

Lockhart - expected inflation at 2%.

Evans - Low risk of high inflation. I fear that inflation will not rise in the near future.

Fisher - I do not fear that inflation is below 2%. The economy is expanding, while not causing inflation.

Emerging markets:

Yellen - The situation in emerging markets do not pose a real threat to growth in the U.S.. Regularly observe changes in these markets.

Lockhart - I do not think emerging markets have an impact on the economic situation in the U.S.. 

Evans - Forward guidance can mitigate the impact of EM on our economy.

Lacker - We focus on our situation. We are up to date with the problems of EM, but the way in which these countries deal with the problems depends on them.

Bullard - We do not see the possibility that these events have had a real impact on the United States.

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FOMC minutes - the most important conclusions:

- The economy will grow at a moderate pace; 

- Some members of the Fed believes that weather factors are detrimental to economic growth; 

- The risk of inflation remaining below 2%; 

- Several members sees the need of raising interest rates before the middle of this year;

- Members of the Fed acknowledged that inflation will slowly come back to 2%, but a few members want to closely monitor inflation; 

- All members agreed that the improvement in the labor market is evident and should be small steps to limit QE3; 

- All members agreed to move away from numerical targets for forward guidance; 

- Worse readings payrolls probably in part due to extremely bad weather.

best regards,

oscarjp