Question

Write a one page summary on Minutes of the Federal Open Market Committee

Staff Economic Outlook
The staff projection for U.S. economic activity prepared for the March FOMC meeting was somewhat stronger, on balance, than the forecast at the time of the January meeting. The near-term forecast for real GDP growth was revised down a little; the incoming spending data were a bit softer than the staff had expected, and the staff judged that the softness was not associated with residual seasonality in the data. However, the slowing in the pace of spending in the first quarter was expected to be transitory, and the medium-term projection for GDP growth was revised up modestly, largely reflecting the expected boost to GDP from the federal budget agreement enacted in February. Real GDP was projected to increase at a faster pace than potential output through 2020. The unemployment rate was projected to decline further over the next few years and to continue to run below the staff's estimate of its longer-run natural rate over this period.

The projection for inflation over the medium term was revised up a bit, reflecting the slightly tighter resource utilization in the new forecast. The rates of both total and core PCE price inflation were projected to be faster in 2018 than in 2017. The staff projected that inflation would reach the Committee's 2 percent objective in 2019.

The staff viewed the uncertainty around its projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The staff saw the risks to the forecasts for real GDP growth and the unemployment rate as balanced. On the upside, recent fiscal policy changes could lead to a greater expansion in economic activity over the next few years than the staff projected. On the downside, those fiscal policy changes could yield less impetus to the economy than the staff expected if the economy was already operating above its potential level and resource utilization continued to tighten, as the staff projected. Risks to the inflation projection also were seen as balanced. An upside risk was that inflation could increase more than expected in an economy that was projected to move further above its potential. Downside risks included the possibilities that longer-term inflation expectations may have edged lower or that the run of low core inflation readings last year could prove to be more persistent than the staff expected.

Answer 1

Minutes of the Federal Open Market committee

A joint meeting of the Federal Opne Market Committee and the Board of Governors was held at the offices of the Board of Governors of The Federal Reserve System in Washington D.C.

A summary of developments in domestic and global financial market, open market opertaions and related issues, incoming economic data released about the prospects of high inflation rate and the high interest rates released recently was brought out.Whilw they continued to excute the FOMCs balance sheet normalisation plant intiated last october they showed great concern towards the steep fall in equity prices and a rise in the associated measure of volatility.

The labor market condition continued to rise with the rise in the real GDP. An expansion in the industrial total prodcution and the manufacturing and mining with a strong gain in the preceding quater was seen with a rise in consumer expenditure.

In the US international trade exports declined and imports were predoninant hencea drag in the GDP.

As per thestaff reviews on the Financial situation the normal treasury yields rose, the net equity prices declined and the corporate bondspread since the financial market was in turbulence.

The bank intermedited credit to businesses slowed as there was a weak loan demand rather than a tight supply. Consumer credits grew and the EMEs were volatile. the dollar index appreciated and the canadian depreciated with a massive devalutaion of Venezuealan bolivar.

the forcast for GDP was revised and softened. the real GDP was projected to. increase ata a faster pace than potential output and the unemployment rate was projected to decline further.the projection for inflation reflected tighly used resources. Althogh the staff reviewed their concern at the uncertainity of the real GDP, the unemployment rate and the inflation rate and the interest rate.

The fiscal policy bought an expansion in the economic activity.