{"id":1191371,"date":"2022-01-05T16:04:49","date_gmt":"2022-01-05T21:04:49","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1191371"},"modified":"2022-01-05T16:04:53","modified_gmt":"2022-01-05T21:04:53","slug":"fed-minutes-point-to-earlier-hikes-and-faster-balance-sheet-rundown-to-thwart-bidenflation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-minutes-point-to-earlier-hikes-and-faster-balance-sheet-rundown-to-thwart-bidenflation\/","title":{"rendered":"Fed Minutes Point to Earlier Hikes and Faster Balance-Sheet Rundown to Thwart Bidenflation"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ffed-minutes-point-to-earlier-hikes-and-faster-balance-sheet-rundown-to-thwart-bidenflation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1191371&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/12\/senate-banking-federal-reserve-chairman-jerome-powell-speaks-senate-banking-committee-hearing-e1639594247756-638x335-1.jpg\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p class=\"subheading\">Federal Reserve officials at their December meeting discussed speeding up the timetable for raising interest rate hikes this year to thwart unexpectedly strong inflation, according to minutes of the meeting released Wednesday.<\/p>\n<p>Officials saw the economy had strengthened more than they had expected despite still high levels of pandemic infections and expressed the view that the labor market was nearing full recovery.<\/p>\n<figure id=\"D-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"M-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"gmxrevmore\" class=\"H\"><\/figure>\n<p>Fed officials also expressed concerns that surging inflation was spreading into more areas of the economy and would last longer than they previously expected.<\/p>\n<p>\u201cParticipants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated,\u201d the minutes of Fed\u2019s monetary policy-setting Federal Open Market Committee said.<br \/>At the conclusion of the meeting, Fed officials announced that they would double the pace of the winddown of the Fed\u2019s bond-buying program. Projections from Fed officials, released at the end of the December 14-15 meeting, showed officials expected three rate hikes this year.<\/p>\n<p>Perhaps the most surprising element of the minutes is the discussion of starting to shrink the Fed\u2019s balance sheet much earlier than many had anticipated. The minutes report that some officials said that it would be appropriate to begin to shrink the Fed\u2019s balance sheet \u201crelatively soon\u201d after the first rate hike.<\/p>\n<figure id=\"M-ROS-B2\" class=\"a8d\"><\/figure>\n<p>The Fed launched a new expansion of its balance sheet when the pandemic hit, purchasing $80 billion of Treasuries and $40 billion of mortgage bonds every month. In September, the Fed announced it would slow down\u2013or \u201ctaper\u201d in Fed-watcher lingo\u2013purchases by $10 billion for Treasuries and $5 billion for mortgage bonds each month. In December, it announced that it would double the pace of the taper to $30 billion.<\/p>\n<p>Even when the taper is complete sometime next year, and the Fed\u2019s balance sheet expansion ceases, the Fed will keep buying bonds to replace those that mature. The last time the Fed tapered its purchases, it took years until it began to actually shrink the balance sheet by not replacing bonds that \u201crolled off.\u201d The minutes from the December meeting suggest that the Fed could begin this process of shrinking the balance sheet\u2013what some refer to as \u201cquantitative tightening\u201d\u2013as early as this year.<\/p>\n<p>The minutes reflect a reversal for many Fed officials.&nbsp; Until the second half of last year, many were focused on the labor market and believed it would take far more assistance to bring it back to full employment. At the same time, they maintained that inflation would fade as supply chain problems were worked out. Instead, the labor market recovered swiftly and inflation grew more severe and widespread.<\/p>\n<p>Even Fed officials who have long been focused on keeping rates low to combat unemployment \u2014 such as San Francisco Federal Reserve Bank President Mary Daly and Minneapolis Fed President Neel Kashkari \u2014 now cite concerns about high inflation as a reason for raising interest rates this year.<\/p>\n<p>A similar rethinking is underway on Capitol Hill, where Democrat Joe Manchin and possibly other Democrats have turned against the enormous spending bills pushed by Democrat congressional leadership and the Biden administration on the grounds that the economy no longer needs fiscal stimulus and inflation is now a much bigger problem than anticipated.<\/p>\n<p><em><strong>\u2013The Associated Press contributed to this report.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve officials at their December meeting discussed speeding up the timetable for raising interest rate hikes this year to thwart unexpectedly strong inflation, according to minutes of the meeting &#8230;<\/p>\n","protected":false},"author":11,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1191371","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1191371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1191371"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1191371\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1191371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1191371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1191371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}