The minutes from the Federal Reserve’s January 29-30 monetary policy meeting have been published with key highlights, via Reuters, found below.
- Substantial majority of policymakers expected that at end of asset redemptions, level of reserves would likely be somewhat larger than needed for conducting rate policy.
- Many policymakers suggested that some further very gradual decline in average level of reserves could be appropriate.
- A few participants judged that there would be little benefit to allowing reserves to continue to fall after the end of redemptions.
- A couple of participants said decreased liquidity at the end of 2018 exacerbated market movements.
- A couple of participants suggested a ceiling facility to mitigate temporary unexpected pressures in reserve markets could play a useful role.
- Policymakers said at end of redemptions it would appropriate to invest most if not all MBS principal payments in treasuries.
- Fed participants felt keeping the fed funds rate stable ‘for a time’ posed few risks at this point.
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