Fed says in minutes consider uncertainty around economic perspectives as ‘high’

Federal Reserve members (Fed) continue to consider the risks around the forecast of skewed inflation upwards, as the projected rise in inflation this year may be more persistent than the one assumed in the grassroots projection, the minutes of the last US BC monetary policy meeting, published on Wednesday (9). According to the document, the Fed still considers uncertainty around economic perspectives as “high”, a reflection of uncertainty around changes in commercial, fiscal, immigration and regulatory policies and associated economic effects. Also, the BC raised the risks around the actual growth projections of gross domestic product (GDP) and employment with low bias, although it considers “the risk of recession lower than at the time of the previous projection.”

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On the other hand, the ATA points out that, with the improvement of the economic perspective, it was not expected that the conditions of the labor market weakened as much as in the previous projection, although the unemployment rate was still planned to increase a little next year and to be a little above the team estimation for its natural rate by 2027. The document also mentions that the inflation projection of the Fed technical team was lower than prepared for the May meeting. “The tariff increases were expected to raise inflation this year and provide a small boost by 2026. Inflation was designed to fall to 2% by 2027,” the note says.

*With information from Estadão Content
Posted by Fernando Dias