The persistence of high inflation and recent economic data have not increased the confidence of Federal Open Market Committee participants that inflation is moving substantially toward the Federal Reserve’s 2% target, according to minutes from the March FOMC meeting released today. The FOMC at its last meeting agreed to hold the federal funds rate target range at 5.25% to 5.5%. The minutes show that FOMC participants believe that monetary policy tightening has reached its peak, and that they could start easing rates later this year if the economy evolves as they expect.
However, the FOMC still saw much uncertainty about the path forward, given recent data. “Participants noted indicators pointing to strong economic momentum and disappointing readings on inflation in recent months and commented that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2%,” according to the minutes. The FOMC next meets April 30-May 1.
