Federal Reserve officials widely favored ending the runoff of the central bank’s balance sheet this year while expressing uncertainty over whether they would raise interest rates again in 2019, minutes of their January meeting showed.
“Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve’s asset holdings later this year,” according to the record of the Federal Open Market Committee’s Jan. 29-30 gathering released Wednesday.
“Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve’s balance sheet,” the minutes said, referring to the rolloff of assets from the $4 trillion balance sheet that began in late 2017.
The minutes elaborated on the dovish message delivered three weeks ago when the FOMC said it will be “patient,” signaling it had put interest-rate hikes on hold and was prepared to be more flexible on shrinking the balance sheet. The shift occurred after the worst December for U.S. stocks since the Great Depression, trade tensions escalated between the U.S. and China, and President Donald Trump berated officials for tightening monetary policy too much.