Fed's minutes reflect confidence in inflation, economic outlook

The Federal Reserve released the minutes of its January 30-31 meeting, at which policymakers votes to hold interest rates unchanged between 1.25% and 1.5%, while asserting the path of policy tightening and three rate hikes this year and expanding the plans of normalizing the balance sheet. 

FOMC members pointed to the data available to the Committee since the December 12-13 meeting, as the labor market kept improving while economic activity expanded, and the unemployment remained fell. 

Members said household spending rose modestly, but consumption growth foundations remained strong, as fixed-rate investment stabilized, while inflation gauges in the last 12 month were near the bank's long-term 2% target, while still below that target when excluding energy and food prices.

Members asserted the Committee's commitment to boost job opportunities and stabilize prices, as members still project gradual tightening of the monetary policy to allow the economy to expand moderately.  

As of 07:15 GMT, the dollar index, tracking the greenback against a basket of currencies, rose 0.15% to 89.80 from the opening of 89.72, with a one-week high at 90.00, and a session-low at 89.71.

Similarly, members said that taking into consideration the labor conditions and current inflation rates, the Committee decided to hold interest raters in the range of 1.25% to 1.50 percent, while keeping the monetary policy accommodative, offering further support to the labor sector and nudging inflation firmly towards 2%. 

The Committee said it's assessing the current and projected economic conditions, with an eye towards achieving its targets of full employment and 2% inflation, while taking into consideration a wide group of data and economic information, including the labor market conditions and inflation indices. 

Members expect the economic conditions to develop in a way that allows for gradual tightening of the policy, with a path that ends just below the projected interest rates levels in the long term, while reaffirming that the actual path of short-term overnight interest rates depends on aforementioned economic projections and data. 

Now markets look forward to the Fed's March 20-21 meeting, the first under new Chair Jerome Powell, at which policymakers will release their three-year forecasts for inflation, unemployment, growth, and interest rates.