May 2–3, 2017 FOMC Minutes

Against the statement·Vote·From the minutes·What changed

Our reading

The minutes are consistent with the statement because they reflect the same key judgments and policy decisions: the labor market is strengthening, the slowdown in first-quarter growth is seen as transitory, inflation is running below 2% but expected to stabilize, and the FOMC agreed to maintain the federal funds rate target range at 3/4 to 1 percent while signaling a gradual approach to future increases.

Dovish

Minutes

Statement

Hawkish

Our reading compares the minutes of the May 2–3 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.

Vote

Lael Brainard
William C. Dudley
Charles L. Evans
Stanley Fischer
Patrick Harker
Robert S. Kaplan
Neel Kashkari
Jerome H. Powell
Janet L. Yellen

From the minutes

FOMC minutes

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions."

Voting for this action: Janet L. Yellen, William C. Dudley, Lael Brainard, Charles L. Evans, Stanley Fischer, Patrick Harker, Robert S. Kaplan, Neel Kashkari, and Jerome H. Powell.

Voting against this action: None.

Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board of Governors voted unanimously to leave the interest rates on required and excess reserve balances unchanged at 1 percent and voted unanimously to approve establishment of the primary credit rate (discount rate) at the existing level of 1-1/2 percent.6

Read the full minutes

What changed from the previous meeting’s minutes

The FOMC voted to maintain the federal funds rate target range at 3/4 to 1 percent, after raising it in March.
Neel Kashkari voted with the majority in May, after dissenting in March against the rate hike.
Core PCE price inflation fell to 1.6 percent in March, down from 1.75 percent in January.
Headline PCE price inflation dropped back to 1.8 percent in March, after edging above 2 percent in February.
The unemployment rate reached 4.5 percent, at or below participants' longer-run normal estimates.
Participants noted the first-quarter slowdown in economic growth was likely transitory.

Summary generated automatically from the two documents.

Source