FOMC Minutes Reinforce the Bleak Outlook
January 7, 2009
The minutes from the FOMC meeting held on December 15-16 highlighted that the US faces significant downside risks. The Fed notes that inflationary pressures are appreciably low, but does not project an economy recovery until 2H 2009. However, the Fed does not commit to using any particular policy tool but to employ “all available tools”, only stressing the need for the fed funds rate to stay “exceptionally low for some time” to help the economy recover from a recession. The US dollar mildly weakened following the release.