The minutes from the U.S. Federal Reserve's April monetary policy meeting, released on May 20, indicate that the central bank may implement measures to tighten monetary policy if inflation in the United States continues to run above its target.
Participants at the meeting noted that due to persistently high inflation and uncertainties surrounding the duration and economic impact of the ongoing conflict in the Middle East, there is a need to maintain the current monetary policy stance for a longer period than previously anticipated.
Most officials emphasized that it could be appropriate to adopt certain policy tightening measures if inflation remains above the 2% target. Nearly all participants expressed the view that the Middle East conflict could persist for an extended period, and even if hostilities cease, prices for commodities such as oil might stay elevated for some time.
Regarding the economic outlook, most officials stated that the conflict has increased uncertainties. Several participants highlighted that current elevated asset valuations heighten the risk of a significant market correction should negative factors emerge.
The Federal Reserve concluded its two-day monetary policy meeting on April 29, announcing its decision to keep the target range for the federal funds rate unchanged at 3.5% to 3.75%. The next monetary policy meeting is scheduled for June 16-17.
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