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Federal Reserve Minutes: Discuss suspending balance sheet shrinkage and focusing on inflation return to target

GuShiio.com learned that minutes of the Federal Reserve’s January monetary policy meeting showed that the committee discussed the possibility of suspending or slowing balance sheet contraction before resolving the debt ceiling issue, which could cause significant fluctuations in reserve balances. Although economic activity continues to expand and the unemployment rate stabilizes at a low level, the committee believes that inflation is still above target and needs to be watched on progress towards returning inflation to the 2% target. In particular, potential trade and immigration policy changes could lead to higher inflation.

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