The Fed released the minutes of the Federal Open Market Committee (FOMC) meeting held on May 3-4.
The minutes of the last meeting, in which the policy rate was increased by 50 basis points to the range of 0.75-1.00%, showed that the Fed would be aggressive in raising interest rates.
In the minutes, it was stated that Fed officials were of the opinion that the contraction in the economy in the first quarter of this year contained a "small signal" about subsequent growth and they expected the economy to grow "solid" in the second quarter.
It was emphasized that extreme caution was exercised against inflation risks.
It was noted in the minutes that the authorities were extremely careful against inflation risks, and it was agreed that these risks were on the upside.
In the minutes, officials noted that developments related to Russia's attack on Ukraine, including increases in energy and commodity prices, increased short-term inflation pressures.
In the minutes, which pointed out that the quarantines related to the Kovid-19 outbreak in China also increased the upward pressure on prices, it was emphasized that with the appropriate tightening of monetary policy and the eventual easing of supply constraints, long-term inflation expectations would support the return of inflation to levels consistent with the bank's long-term target.
Fed officials agree that the US economy is very strong
In the minutes, it was stated that the officials agreed that the US economy is very strong, the labor market is extremely tight, and the inflation is well above the 2 percent target, and in this context, it was stated that all officials agreed at the May meeting that it is appropriate to increase the target range for the federal funds rate by 50 basis points.
It was noted in the minutes that the authorities also supported the plan to reduce the Fed's balance sheet:
“All participants reiterated their strong commitment and determination to take the necessary measures to restore price stability. To this end, participants agreed that the Committee should rapidly shift its monetary policy stance to a neutral stance, through both increases in the federal funds rate target range and reductions in the size of the Fed's balance sheet. Most respondents agreed that 50 basis point increases in the target range would be appropriate in the next few meetings.”
New York stock market closed with rising after Fed minutes
On the other hand, the New York stock market closed the day with rising after the US Federal Reserve) signaled that it would be aggressive in raising interest rates.
At the close, the Dow Jones index gained nearly 200 points and rose 0.60 percent to 32,120.28 points.
The S&P 500 index rose 0.95 percent to 3,978.74 points, and the Nasdaq index gained 1.51 percent to 11,434.74 points.
Indices followed a positive course at the close after the minutes of the Fed's last meeting were published.
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