January FOMC Minutes

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Key Highlights:

  • 2011 GDP increases from 3.0-3.6% to 3.4% -3.9%
  • 2011 Unemployment rate declines from 8.9-9.1% to 8.8-9.0%
  • 2011 PCE Inflation increases 1.1-1.7% to 1.3-1.7%

On labor: "Overall, meeting participants continued to express disappointment in both the pace and the unevenness of the improvements in labor markets and noted that they would monitor labor market developments closely."

On the stock market as the economy: "Conditions in financial markets improved somewhat further over the intermeeting period. Broad equity prices rose, adding to their substantial gains since the middle of 2010."

On the wrong interpretation of the steep yield curve: "Some participants noted that a steep yield curve is a typical feature of an economy in recovery, and that much of the steepening appeared to have occurred in response to stronger-than-expected economic data."

On the surge in commodity prices: "Regarding risks to the inflation outlook, some participants noted that increases in energy and other commodity prices as well as in the prices of imported goods from EMEs posed upside risks."

On ending QE2: "A few members noted that additional data pointing to a sufficiently strong recovery could make it appropriate to consider reducing the pace or overall size of the purchase program. However, others pointed out that it was unlikely that the outlook would change by enough to substantiate any adjustments to the program before its completion."

On the head of the Plunge Protection Team: "By unanimous vote, Brian Sack was selected to serve at the pleasure of the Committee as Manager, System Open Market Account, on the understanding that his selection was subject to being satisfactory to the Federal Reserve Bank of New York."

On Fed monetary policy-driven revolutions in Tunisia, Egypt, Algeria, Morocco, Libya, Bahrain, Yemen, and Iran: "..."

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