February 4, 2023

Federal Reserve FOMC minutes (December meeting) – ‘transitory’ dropped

The FOMC finally admitted they were behind the curve on inflation at the December meeting, dropping ‘transitory’ from the description of rising prices in the US.

The Committee decided to ‘taper’ at a faster rate, but even doing so they remain on the dovish side of the spectrum.

Brief comments from TD

  • Following the FOMC’s decision to double the pace of QE tapering and the projection of a significantly more hawkish dot plot, focus will now turn to the elements that led to the evolution of views among policymakers (including on “maximum employment”) after the November meeting.

I’d describe the new dot plot as ‘less dovish’ not ‘more hawkish’, but, yeah, it’ll be instructive to hear what the FOMC c considers important for policy deliberations immediately ahead.

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