The minutes of the meeting show that the Fed may raise interest rates in advance and start ＂shrinking the table＂

　　Xinhua News Agency, Washington, January 5 (Reporter Xu Yuan Gao Pan) The minutes of the December 2021 monetary policy meeting released by the Federal Reserve Board on January 5 showed that under the background of the strong US economy and rising inflation, the Federal Reserve may raise the federal funds rate ahead of schedule, and then start the process of reducing its balance sheet.

　　According to the minutes of the meeting, Fed officials generally pointed out that considering the US economy, labor market and inflation situation, the ultra-loose monetary policy implemented at the initial stage of the COVID-19 epidemic is no longer reasonable, and it may be necessary to raise the federal funds rate earlier than expected. Almost all the officials attending the meeting agreed that it "may be appropriate" to start the process of "shrinking the table" at some point after the first interest rate hike. Some officials attending the meeting supported the "relatively soon" start to "shrink the table" after starting to raise interest rates.

　　The minutes of the meeting show that the high price level in the United States has aroused the high vigilance and concern of Fed officials. Fed officials generally believe that rising prices increase the risk of worsening inflation, and the emergence of the mutant Covid-19 Omicron strain may aggravate this risk. At the same time, rising housing costs and rents, broader wage growth and longer-term global supply bottlenecks may all change the inflation outlook. Some officials at the meeting pointed out that the Fed has reason to adopt a "less loose monetary policy stance" in the future.

　　The Federal Reserve held a monetary policy meeting on December 14-15, 2021, and announced that it would expand the scale of asset purchases and reduce them to $30 billion every month. At this rate, the Fed will end its asset purchases in mid-March this year. At the same time, 18 members of the Federal Open Market Committee of the Federal Reserve agreed that the Fed will raise the target range of the federal funds interest rate at least once this year, and 10 of them are expected to raise the interest rate level to 0.75% to 1% three times.

　　Analysts believe that although the Fed did not clearly indicate when to raise interest rates, it released a signal that it might raise interest rates in advance. According to data from the Chicago Mercantile Exchange, it is widely expected that the Fed will raise interest rates for the first time in March this year, start the second rate hike in June or July, and complete the third rate hike in November or December.

　　According to the minutes of the meeting, the Fed has not made a decision on when to start selling its nearly $8.3 trillion in US Treasury bonds and mortgage-backed securities. However, some experts predict that the process of "shrinking the table" may begin before this summer at the earliest.