Fed Rates Steady, Balance-Sheet Runoff to Slow

Latest FOMC Meeting Updates

December Minutes Reveal Policy Considerations

The Federal Reserve has voted to keep interest rates steady, while announcing plans to slow the reduction of its balance sheet. The decision follows the release of minutes from the Federal Open Market Committee's (FOMC) December meeting, which showed officials discussing the potential impact of slowing economic growth on their policy stance.

The minutes also revealed that officials were divided on the pace of future rate hikes. Some members favored a more gradual approach, while others argued for a more aggressive tightening path. Ultimately, the committee decided to maintain its current pace of rate hikes, with quarterly increments likely in the future.

The Fed's decision to slow the reduction of its balance sheet is a further sign of its willingness to support the economy in the face of heightened uncertainty. The balance sheet, which includes Treasury bonds and mortgage-backed securities, has been shrinking as the Fed has allowed its holdings to mature without reinvesting the proceeds. By slowing the runoff, the Fed can provide additional liquidity to the markets and help keep borrowing costs low.