Minutes of the Federal Open Market Committee

Committee participants began discussions related to their review of the Federal Reserve's monetary policy framework. This review is focused on two specific areas: the Committee's Statement on Longer-Run Goals and Monetary Policy Strategy, which presents the Committee's approach to the conduct of monetary policy, and the Committee's policy communication practices. The Committee's 2 percent longer-run inflation goal will be retained and is not a focus of the review.

The manager noted that inflation offsets overall increased slightly. However, both the survey measures of inflation expectations and prices in the Treasury Inflation-Protected Securities market remained fairly consistent with predictions that inflation would return to the Committee's 2% inflation target.

In money markets, the manager noted that a quarter-point lowering of the target range for the federal funds rate in December was fully carried over to other short-term rates. Additionally, the 5 basis point technical adjustment to the overnight reverse repurchase agreement (ON RRP) offering rate made in December appears to have been passed through almost entirely to the repurchase agreement (repo) rate.