- Well positioned to wait for more clarity on inflation/economy
Participants agreed that uncertainty about the outlook had increased and it was appropriate to take a cautious approach to monetary policy
Participants agreed that risk of higher inflation and higher unemployment had risen
Participants at the May 6–7 meeting agreed they were well positioned to wait for more clarity on the outlook
Participants agreed that risks of higher inflation and higher unemployment had risen
Participants agreed that uncertainty about the outlook had increased and it was appropriate to take a cautious approach to monetary policy
Almost all participants commented on the risk that inflation could prove more persistent than expected
Participants noted they may face “difficult tradeoffs” if inflation proved more persistent while outlooks for growth and employment weakened
Participants saw uncertainty about their economic outlooks as unusually elevated
Staff projection for 2025 and 2026 GDP growth was weaker than their estimate at the March meeting
Staff cited tariff policies as implying a larger drag on activity than policies they had assumed in their prior forecast
Committee voted to renew dollar and foreign currency swap lines
These participants noted that a durable shift in such correlations or a diminution of perceived safe-haven status of U.S. assets could have lasting implications for the economy
Some participants commented on changes in typical correlations across asset prices in the first half of April
The meeting was before the lowering of the China tariffs along with other fiscal issues since then. However Fed officials are pretty adamant that uncertainty remains high and this is likely to keep the Fed on hold until that time where they can assess tariffs or lack thereof, inflation, the employment situation and the disparity between the soft and hard economic data which are diverging.
The major stock indices are near unchanged with the Dow industrial average down -0.31%, the S&P down -0.14% and the NASDAQ up 0.05%.
US yields remain higher, with the two-year up 4.3 basis points at 3.992%. The 10 year is up 4.7 basis points at 4.481%, and a 30 year is up 3.9 basis points of 4.979%.
