The
Federal Reserve's minutes for the January 30-31 meeting highlighted that
interest rates would remain unchanged for a while and that the current monetary
policy stance was appropriate.
Current
policy stance to 'remain appropriate for a time,' the minutes said, citing that
the outlook for the economy had gotten “stronger” from the previous meeting.
“They
expected economic growth to continue at a moderate pace, supported by
accommodative monetary and financial conditions,” according to the
minutes.
Policymakers
said that that some trade uncertainties had diminished recently, but
uncertainties about the outlook remained, including those posed by the outbreak
of the coronavirus.
Holding
the line on rates “would give the Committee time for a fuller assessment of the
ongoing effects on economic activity of last year’s shift to a more
accommodative policy stance and would also allow policymakers to accumulate
further information bearing on the economic outlook,” the minutes said.
Fed
minutes cited easing of trade tensions, receding risks from Brexit and
stabilizing global growth as reducing downside risks, yet agreed that threat
from coronavirus 'warranted close watching'.
Regarding
inflation, the post-meeting statement stressed that the Fed wanted inflation
“returning to” 2% rather than “near” it as previous statements had indicated.
“Many
participants stressed that, as reserves approached durably ample levels, the
need for sizable Treasury bill purchases and repo operations would diminish and
that such operations could be gradually scaled back or phased out,” the minutes
stated.
The
minutes also said the reserve level likely would retreat to $1.5 trillion
around tax season but then stabilize.
As
of 19:25 GMT, the U.S. dollar index traded higher for a sixth straight session
at 99.59, the highest since May last year.
On Wall Street, the
Dow Jones added 0.5 percent, the S&P 500 index surged 0.6 percent and the Nasdaq
Composite edged up 1 percent.