December 14–15 · Published January 5, 2022
Jerome H. Powell
December 14–15, 2021 FOMC Minutes
Our reading
The minutes read more hawkish because they include detailed, candid discussions among participants about the need to potentially raise interest rates sooner or faster than previously anticipated, the risk of inflation expectations becoming unanchored, and the possibility of shrinking the balance sheet soon after rate hikes—nuances and internal deliberations that are deliberately omitted from the more formal, consensus-based public statement.
Our reading compares the minutes of the December 14–15 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Thomas I. Barkin
- Raphael W. Bostic
- Michelle W. Bowman
- Lael Brainard
- Richard H. Clarida
- Mary C. Daly
- Charles L. Evans
- Jerome H. Powell
- Randal K. Quarles
- Christopher J. Waller
- John C. Williams
From the minutes
FOMC minutes
Voting against this action: None.
Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board voted unanimously to maintain the interest rate paid on reserve balances at 0.15 percent, effective December 16, 2021. The Board also voted unanimously to approve establishment of the primary credit rate at the existing level of 0.25 percent, effective December 16, 2021.
At the end of the meeting, the Chair noted that the Board's staff had made substantial progress in developing formal polices to implement the tough and comprehensive ethics rules for senior officials that were announced in October.
It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, January 25–26, 2022. The meeting adjourned at 11:00 a.m. on December 15, 2021.
What changed from the previous meeting’s minutes
- The FOMC removed the reference to inflation factors being "expected to be transitory" from the postmeeting statement.
- The monthly pace of net asset purchase reductions was doubled to $20 billion for Treasury securities and $10 billion for agency MBS starting in January.
- Net asset purchases are now expected to end by mid-March 2022, a few months sooner than anticipated at the November meeting.
- The postmeeting statement added a risk from new variants of the virus to the economic outlook.
- The statement now notes that inflation has exceeded 2 percent for some time, replacing the previous language about aiming for inflation moderately above 2 percent.
- Several participants viewed labor market conditions as already largely consistent with maximum employment, a shift from the prior assessment of substantial further progress.
Summary generated automatically from the two documents.