Fed Minutes Wrap-Up

The Federal Reserve (Fed) reassured markets that its rake hike pace would remain gradual with the release of its May 1–2 policy meeting minutes last Wednesday. While the minutes revealed a generally upbeat assessment of the economy consistent with Fed views since the start of the year, markets read the overall tone of the minutes as modestly dovish, helped by some context on the Fed’s additional emphasis that its 2% inflation target is “symmetrical.” The language has been widely used in the minutes and statement for some time, but garnered closer scrutiny after the policy statement added the phrase again in a key passage. By highlighting that its inflation target was symmetrical, the Fed reminded markets that it does not think of its target as a line in the sand, but as a goal that will have some wiggle room.

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