Federal Reserve policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary, though most said a hike was coming soon, minutes from their last policy meeting showed on Wednesday.
Nearly all policymakers at the May 2-3 meeting also said they favored beginning the wind-down of the U.S. central bank’s massive holdings of Treasury debt and mortgage-backed securities this year.
While investors continue to see a rate increase as highly likely next month, the minutes showed that the Fed’s rate-setting committee “generally” believed it hinged on the economy rebounding from its sharp slowdown in the first quarter.
PG View: The post release drop in yields and the dollar — and rise in gold — is reflective of modest ebb in June rate hike expectations. The Fed rightfully remains cautious.